We’ve invited one of our preferred mortgage brokers, Mike Popnoe with Mortgage Trust, Inc., to be a regular contributor to our blog. He will be sharing his insights and observations on the mortgage market in the Portland Oregon area. Take it away Mike!
Are low down payments a bad thing?
Many of my clients are shocked to learn that they can purchase a home in today’s real estate market for 3.5% down payment, or $0 down with certain loan programs. In the same breath, they ask how this is possible … “isn’t that the whole reason we are in this mess today?!”. The honest answer is “No”. I will admit, there are certainly homeowners with negative equity that simply walk away from their homes – but what typically drives the foreclosures is the affordability of the monthly payment. In the not-so-distant past, borrowers were able to be qualified on a reduced mortgage payment, either because the payment required was simply interest-only, or that the initial interest rate was very small only to adjust a short while later. This false sense of stability is what got people into homes they truly could not afford.
In today’s lending environment we focus on the affordability component more than ever. If your income can support the full housing payment, in addition to any other monthly debts you have, then whether you put $0 down or 20% down payment on the home – we feel secure in your ability to make your payments and remain in the home. With rates this low, partnered with low prices and low down payment requirements – it is a fantastic time to look into your options.
We’ve been recommending Mike to our clients for years now and find him to be a very professional mortgage broker with a lot of integrity. If you would like more info on Mike and his services you can go to his website or reach him directly at 503-488-1818.