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The Myth of 20% Down A s I work through my 22nd year in County market and those buying at the the Mortgage Business, I see higher end. Jumbo loans lean heavily on similarities between when I started your reserves after closing and your credit and today. There is simplicity to the business score. Some have Mortgage Insurance and now that I remember from my early days. some do not require them. Based on how Gone are many of the exotic and dangerous values have moved up quickly in our loans, fixed rate and fixed rate ARM’s market, these loans are becoming more dominate, and guidelines are built around and more popular. full documentation and full disclosure. By Jayson Stebbins Mortgage Professional That does not mean that in order to allow for down payments as low as 5%. For buy a home you have to have 20% down. first time buyers, you may even qualify for I spoke to a potential buyer who expressed as little as 3% down. These loans require frustration about missing this window of Mortgage Insurance, but allow for creative opportunity because they hadn’t saved up options to pay it monthly, or pay it all at enough to put down 20%. The Myth of once at closing. 20% down can be busted by many loan Jayson Stebbins is a 22 year veteran of the Mortgage Banking industry and an Accredited Mortgage Professional through the Mortgage Bankers Association. He grew up in Morgan Hill and currently lives in Gilroy. He is the local Branch Manager of Guild Mortgage, a 55 year old Mortgage Banking firm. His office is in Morgan Hill and serves all of Santa Clara, San Benito, and Monterey counties. You can reach Jayson and his Team at 408-782- 8800 or at www.stebbinsmort- Conventional, conforming loans still Loans backed by the Federal Housing Administration, or FHA, have a 3.5% programs out there today. Just this month, my Team and I helped minimum down payment requirement. You some first time buyers into their first do not have to be a first time buyer to access home using a 5% down program with FHA financing. FHA allows for expanded Conventional financing, and two Down qualifying ratios and is more lenient on Payment Assistance programs from the credit scores. FHA has its own Mortgage state. Their total cost to buy the home was Insurance as opposed to private insurance, a $3000 out of pocket investment. These and they recently modified the cost to make stories happen every day, as do loans on it cheaper than it was early last year. The US Department of Agriculture does programs listed below. Remember that if you choose to put loans, and they offer 100% financing. It is down less than 20%, you are entering into limited to certain counties and cities, and a loan that could have Mortgage Insurance there are income limitations for those using requirements. This additional component the USDA loan program. of the payment is important to consider for Investors who are buying property will qualifying purposes, and has rates that vary usually still be required to put down at by program. least 20%. What about Jumbo buyers? Currently The Myth of 20% down should not there is a program allowing for as little as keep anyone from exploring their options 5% down, and plenty of options with 10% in today’s market of record low rates and down. This is important for the Santa Clara strong real estate values. GILROY • MORGAN HILL • SAN MARTIN JULY/ AUGUST 2015 49