Low down payment mortgage waits for first time home buyer by the first quarter of 2019. This is after current mortgage rates hit a 52-week low. The Federal Reserve announced that they will have no plans yet of increasing interest rates for the year 2019.
Analysts’ prediction for mortgage rates is 5.25% for 2019. Instead, they now predict a drop rate would be as low as 4%. According to the executive vice president of Quicken Loans Bill Banfield, “This drop in rates is going to give the housing market a boost.”
It may seem that the 1% drop rate is low but it is actually significant. To illustrate, let’s take a $200,000 mortgage as an example. We are talking about $120 decrease in your monthly mortgage here for a 30-year fixed rate. Home buyers can somehow get one-month free mortgage each year.
All in all, this might be perfect timing to find and get home. Here are some tips on how to get a low down payment mortgage for first time home buyers:
Take time to research
With this drop in mortgage rates, we can expect that real estate’s industry will take this opportunity to hype their advertising campaign. So don’t fall too quickly with sweet words and glittery offers.
Check the banks’ offer
Research and compare bank rates and programs for first-time home buyers. Some of them and even non-banks institution give subsidies for you to have a low down payment mortgage.
Improve your credit score
The FHA just recently announced that they will impose a manual review for home loan applications. This means you have to go through a stricter process before approval.
Set realistic goals
A low down payment and mortgage rate does not mean low-cost housing. You have to look at the bigger picture and think long term. Go for the house that you can afford and fits you best.
Save for the down payment
This will help you avoid paying private mortgage insurance (PMI). PMI protects the mortgage company in case you fail to pay and have to foreclose. (Keywords: low down payment mortgage no PMI, no down payment first time home buyer, how to buy a house with no money down first time home buyer, how to buy a house with no money down and bad credit)