|graph via The Washington Post|
Over the last several months, a huge debate about making 20% down payments mandatory when purchasing a home has been raging in the news, blogosphere and in real estate brokerages across the country.
If you've been out of the loop, basically the gov has decided to implement a minimum 20% down payment for conventional loans in order to obtain a mortgage at the best interest rates. If you're using an FHA loan, the minimum down payment will remain 3.5%.
What's the point? To make sure we never have another financial meltdown like the one we just witnessed.
Personally, I am not in favor of a 20% down payment. I know I'm biased. A 20% down payment would impact some of my business.
On the other hand, DC is expensive. Coming up with 20% down payment or $80,000 on a 400K property (the *informal* average price of DC property) is a struggle for most buyers. I have plenty of clients who manage to save 20% down on average salaries and I'm always thrilled for them.
Furthermore, buying a property these days is rife with hurdles. Why make it even harder?
I also don't think obtaining a loan should be easy as it was in the early 2000's. But lenders are rejecting fantastic loan candidates for the stupidiest reasons. If it didn't break client confidentiality, I could give you multiple examples.
Meanwhile, I (and every other realtor in the country) will be watching closely how the issue is resolved.