20% Down Myth
Have you been putting off buying your first home because of the massive initial investment involved? Do you assume that the best place to go for a home loan is to your bank? Did you know that there are often multiple home loan options for you, depending on your situation? Motto Mortgage President Ward Morrison joins Adam for this episode of Start with a Win to provide the answers you’ve been looking for and some answers to questions you didn’t even know you had!
On this episode of Start with a Win, our guest is Ward Morrison, President of Motto Mortgage. He explains to listeners the difference between traditional banks and mortgage brokerages when it comes to getting home loans and demystifies the mortgage process for those who are considering purchasing their first house.
The main thing to keep in mind is that mortgage professionals at brokerages such as Motto Mortgage are able to shop around for the best loans for their customers. Gone are the days of a mandatory 20% down payment and only being able to choose between the few loan options presented to you by your bank. Much like independent insurance agencies are able to curate policies from multiple sources for their customers to review, mortgage brokers put in the extra effort to find loans that fit their customers’ specific situations.
For instance, the typical down payment for conventional loans such as FHA is 5%, but sometimes 3.5% is all that is required. Through VA loans, veterans are able to secure home financing with 0%, and people living in rural areas can take advantage of the 3-5% down payments through USDA loans. If homeowners do not put 20% down, they are subject to monthly mortgage insurance payments, but a loan professional would be able to talk them through that process and ways to avoid these payments with things like piggyback loans.
Overall, Ward wants to encourage potential homebuyers to be aware of their credit scores, take any necessary steps to improve them, and think through their sources of funds before seeking a home loan. But once you are ready to take the first step, a mortgage professional will be right there to meet you and guide you the rest of the way.
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