Many people assume that mortgages have always had a 20 percent down payment requirement. This assumption stems from the media and from financial advisers that have usually talked about the traditional conventional loan that truly has a 20 percent down payment.
In a lesser capacity, banks and lending institutions may have also encouraged such an assumption by dealing only with 20 percent conventional loans. What is the truth?
Although 20 percent mortgages do exist, mortgages with lower down payments also exist. In fact, many home buyers in the past five years have already opted for home loans with down payments lower than 20 percent.
Even more surprising, back in 2003, one Chicago man bought a multifamily building with only a 5 percent down.
Only a Few Know
What other statistics show the 20 percent down payment is all but gone? According to data from the National Association of Realtors, more than half of first-time homebuyers can access mortgages with down payments of 6 percent or less.
Sadly, only a few as 13 percent of young homebuyers know about such accessibility.
Take Your Pick
Now you can consider yourself a part of the few people who know about the lower mortgage downs. You can find various mortgages with different down payments. You can have a mortgage with a 10 percent, a 15 percent, a five percent, or less than five percent down.
With these options, do you still have to consider the 20 percent down payment?
Why 20 Percent
You can definitely opt for Utah home loans with a less than 20 percent down payment, but the typical 20 percent can teach you quite a few things. A 20 percent down payment allows you to skip the payment for mortgage insurance.
You can also have a lower interest rate and lower monthly payment. Lenders will even fight over you.
As you shop around for a Utah home loan, you can now make a better decision since you know a 20 percent down payment is not mandatory. Happy shopping!