With Terry Story, 27-year veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
No one is going to get excited about 3% discount on a $10 movie ticket, but to buy a house with only a 3% down payment on a $250,000 mortgage could be cause for a big celebration.
Up until now, a 3% down payment on a home mortgage was only available with FHA loans and, even at that, the cost of the required mortgage insurance had gotten quite high. Recently, major lenders, such as JP Morgan Chase, Wells Fargo, and Bank of America, began offering their own version of 3% down mortgages which do not require the applicant to buy mortgage insurance. (A minimum credit score, somewhere 620 and 660, is a requirement, however.) Some of the thinking behind these large institutions easing up on mortgage requirements boils down to their desire to create lifelong customers who will be buying and utilizing other banking products in the future.
These new home mortgage products are quite attractive for the young first-time home buyer who typically could not come up with the higher percentage down-payment.
Terry’s Real Estate Survival Guide section this week addresses the importance of the seller’s property disclosure. Your real estate agent requires the seller to fill out a list informing the buyer as to what may be wrong with any part of the house, such as a faulty air conditioner or a sometime water leak in the attic. This disclosure does not obligate the seller to repair or replace anything, it simply allows the buyer to either negotiate for repairs or to accept the property as is. Not complying with this requirement can result in legal action against the seller after the sale, so it’s best to pay heed.
Terry says she’s frequently asked about the most solid or the best property investments, which presently in our South Florida area are:
* Senior housing
* Student housing
* Warehouses
* Neighborhood strip malls
* Self-storage
From changes in mortgage requirements to finding the most desirable neighborhood for your needs and everything in-between, Terry Story always has her finger on the latest trends in the real estate market.
Read The Entire Transcript HereCollapse Transcript
Steve Pomeranz: It's time for Real Estate Roundup with Terry Story. Terry is a 27-year veteran with Coldwell Banker located in sunny Boca Raton, Florida. Welcome back to the show, Terry.
Terry Story: Thanks for having me, Steve.
Steve Pomeranz: I've heard now that the 3% down payment for a mortgage is getting to be quite of a regular thing. Are banks aggressively marketing these?
Terry Story: They are. Usually they were through the Federal Housing Administration, FHA, loans. They're great programs, 3% down, but what's happened is the cost to do these mortgages has gotten really high. You're required to have mortgage insurance and the cost of mortgage insurance has gone up. Lenders such as JPMorgan Chase, Wells Fargo, and some other lenders, Bank of America, are now offering their own version of the 3% down, and in some cases, they're not requiring any mortgage insurance. In essence, what's happening, Steve, you're basically getting the same product at less cost. For example, with Wells Fargo's program, you can get down payment assistance from the form of gifts or community assistance programs.
Steve Pomeranz: They don't care how you get the money. They used to care, but you're saying they don't really care anymore how you get the money. They must have some other requirements. It must be tougher to get those mortgages.
Terry Story: Yeah. You're going to have to have certain credit scores. Wells Fargo wants a minimum of 620. They're going to have some requirements. The thought behind all of this, Steve,
