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Now that real estate prices have rebounded, low-down payment loans are back. I don’t understand why there isn’t more griping over the fact that while real estate prices are low, loans are difficult to come by. When values reach the near breaking point, all types of new opportunities arise for those who have fewer means.
Lenders are now making loans with as little as a 3% down payment. These are conventional loans, with a maximum loan amount of $417,000. But with the average sales price of $700,000+ for La Crescenta homes. 800,000+ for homes in Pasadena, $1,500,000+ for La Canada homes. And $750,000+ for homes in Glendale is a non-event for those seeking to purchase a single-family home in the more desired Los Angles neighborhoods.
Down payments of 3.5% for FHA loans continue to be available for loan amounts to $625,000. And the mortgage insurance premium paid by the buyer has been decreased. But, home buyers with lower down payments, especially those seeking FHA loans, are typically low men on the totem pole when it comes to having an offer accepted in a multiple-offer situation.
And the bottom line: The lower the down payment, the higher the monthly payment.
Related Post: Prepayment Penalties are Back
