Pending Home Sales increase 5.3%

Pending Home Sales for March increased 5.3% beating the initial estimate of 5.0% but down from the previous months  reading of 8.3%. Most of the recent gains can be attributed to homebuyers taking advantage of the expiring Tax Credit. While the overall housing market seems stronger than this time last year we may see moments of volatility throughout the recovery. Until we can observe how the markets react without the government stimulus, it will be difficult to gauge the strength of the housing market.

How much do I need for a down payment?

Now that 80/20’s, piggyback loans and sub prime mortgages no longer exist in today’s market, many consumers have come to believe putting 20% down is the only way to qualify for a mortgage. While that may be the historical requirement for banks, the Federal Housing Administration (FHA) and Private Mortgage Insurance (PMI) companies have made it possible to purchase a home with as little as 3.5% – 5% down. FHA and PMI companies will provide mortgage insurance to guard against any loss if a home owner were to default on their loan. This extra security provides confidence to the lender when funding transactions with less then 20% down. Any time a lender has to finance more than 80% of your purchase price or value of your home you will be required to pay mortgage insurance. This amount will vary depending on your loan type, loan amount, down payment, and credit scores.

Each state also has special down payment assistance programs available for first time home buyers or home buyers in their targeted areas. For more information about WA down payment assistance programs please attend my next Washington State Home Buyers Education Seminar.