So when you are looking to buy a home, how much do you think you need for a down payment? 5%? 10%? What about 20%?

I get people saying to me all the time, “I can’t buy because I don’t have 20% down.” But its not true!

I want to find the news reporters who keep this myth alive, dress them in Lady Gaga’s meat dress and introduce them to a pack of coyotes.

The reality is that with a high enough credit score, you could qualify for a loan where you only need to pay 3% down!

How amazing is that? A new home with only 3% down!

But what about all this talk of 20% down to qualify?

It’s all nonsense. Period. End of story. Jeannie Bolger, Senior Loan Officer with Nova Home Loans, believes the 20% down payment myth stems from misinformation and everyone wanting to give advice without actually doing the research.

(By the way. I love Jeannie. She is great. She gets people qualified and works hard throughout the process.)

So how can you qualify for the 3% loan? To begin, the loan is backed by FannieMae/Freddie Mac (aka, the guv’mt). According to Bolger, to qualify you need at least a 680 credit score. Keep in mind this is only a minimum and is not a guarantee.

Having a lower credit score doesn’t hinder you, in fact, if you have a credit score of 640 you could qualify for a loan with paying 3.5% down!

Don’t get me wrong, paying more as a down payment is great if you can afford it because it can save you money on interest rates. Plus, paying 20% down allows the home buyer to waive the mortgage insurance premiums.

This is an amazing opportunity for people to take advantage of and should not be passed up. With interest rates near (or under) 5% and homes at their rock-bottom prices, now is the best time in over 40 years to buy a home.

So snap up those short sales or foreclosures with an incredibly low down payment and give me a call today to help you find the perfect home!

Short sales. Foreclosures. The media will tell you how bad it is.

I’ll tell you, this is a market of opportunity.

But if you are going to take advantage of this opportunity, you need to understand the pros and cons of short sales.

Why? Because short sales are becoming an increasing proportion of the market.

Why? Because the market is turning around.

Sound counter intuitive? It is, I agree.

The number of short sales has increased as a portion of the entire market because the number of foreclosed properties is shrinking.

With the number of foreclosures drastically shrinking in the Phoenix real estate market and the rapid increase of short sales, those looking to buy will be forced to wait unless they decide TODAY to buy (not literally today, but in the near, and I mean very near, future).

Check out the graphs, below. In the first one you can see those two pies. Notice that the one of the left represents active listings. See the light blue area? Those are “pre-foreclosures” or “short sales.” The red area is lender owned property and the dark blue represents normal sales.

So, look at the right hand pie. These are monthly sales –those that actually close. The red area is much larger because the foreclosed properties actually close.

With the increased number of short sales on the market, a homebuyer waits an average of 3-6 months before closing the deal, and only 40% of transactions actually close.

So, what is the trade off? Not much, really. You can see the bar graph below the pies showing that prices for foreclosed homes are lower than short sales. Problem: there are fewer of them to look at.

Am I saying not to even look at short sales? Nope. Just know what the risks are. If you need to close in a hurry, don’t look at short sales. If you have a longer time horizon, then this can be a great way to find some incredible deals.

Check out the graph further below to see how the number of short sales versus foreclosed properties has changed over the course of the year.

Then give me a call and let’s talk about how I can help you.