Today’s 7 Mortgages That Permit Low- or No-Down Payment
An otherwise-solid June 2018 jobs report is offset by weakening wage growth, affecting mortgage rates; current interest rates and the 5-day trend; and, the many ways home buyers can purchase a home with little or no money down.
Mortgage Rates Briefly Drop After Jobs Report Release
The June 2018 Non-Farm Payrolls report pushed mortgage rates lower, closing out a better-than-expected week last week for buyers of homes and refinancing households.
Released on the first Friday of each month, the Non-Farm Payrolls report details the size of the U.S. workforce, the national rate of unemployment, and average worker wages.
Commonly called “the jobs report”, the Bureau of Labor Statistics’ monthly issuance is closely watched by Wall Street, policy-makers, and the Federal Reserve. Non-Farm Payrolls is a barometer for the health of the broader U.S. economy, and a window into upcoming inflation.
Inflation affects mortgage rates and home affordability, so Non-Farm Payrolls matters in housing.
The June jobs report showed 213,000 net new jobs added to the U.S. economy last month which is in-line with the average of the last six months; it’s a figure that’s neither strong nor weak.
The report also showed the U.S. Unemployment Rate increasing two-tenths of a percentage point to 4.0 percent, which also made no effect on rates.
However, one area of the Non-Farm Payrolls report — Average Hourly Earnings — caused mortgage rates to retreat.
Hourly earnings are what employees earn for doing their jobs and, in June, wage growth slowed; employees aren’t getting the same raises and payroll checks as compared to May.
Less money earned is less money spent, and that makes inflation less probable.
When inflation rates drop, mortgage rates drop and that’s what happened Friday. Get a look at today’s live rates by getting a free rate quote now.
Today’s Mortgage Rates & Interest Rate Trends
Mortgage rates are climbing today.
The holiday week is over and interest rates are rising. Home buyers and refinancing homeowners face higher rates across all loan products and terms.
Rates are higher for 15-year fixed-rate mortgages and 30-year fixed-rate mortgages. Rates for 5-year and 7-year ARMs are mostly unchanged.
Despite today’s worsening, mortgage rates for purchase and refinance loans remain near their lowest in seven weeks. Pricing is favorable relative to the most recent sixty calendar days.
- Conforming mortgages: Higher
- FHA mortgages: Higher
- VA mortgages: Higher
- USDA mortgages: Higher
- Jumbo mortgages: Higher
Mortgage rates are personalized. When you’re shopping for the best available rate, your quotes won’t match what your neighbor, family member, or co-worker gets.
Interest rates are based on more than a dozen factors including loan size, credit score, and days until closing. How you elect to pay closing cost matters, too.
Borrowers who choose to pay discount points to their lender get lower mortgage rates than borrowers who opt for zero-closing closing mortgages; and, every lender prices mortgage loans differently.
Talk to two or more lenders before locking a rate. Comparison shoppers save money.
Get A Comparison Quote Here
Today’s Low- And No-Down Payment Mortgages
Home buyers don’t need twenty-percent down payments to buy homes, and many people don’t know that.
According to a survey of more than 3,000 renters conducted by mortgage software company Ellie Mae, the number one reason renters say haven’t homes is because “I haven’t saved enough for a down payment.”
And, that’s a shame because home buyers don’t need to save down payment monies in order to buy a home. There are seven low- and no-down payment mortgage loans backed by the U.S. government; and, a handful of programs available via various mortgage lenders.
The seven government-backed loans are:
- HomePath from Fannie Mae: 5% minimum down payment
- The FHA loan: 3.5% minimum down payment
- The Conventional 97 loan: 3% minimum down payment
- Fannie Mae’s HomeReady: 3% minimum down payment
- Freddie Mac’s Home Possible: 3% minimum down payment
- The VA loan: 0% down payment
- The USDA loan: 0% down payment
Each of the above loan programs are readily available and most can be pre-approved by a lender immediately, upon request.
There are also niche low-down payment programs packaged by lenders as “jumbo loans”, which can used by buyers as well.
Furthermore, many state and city governments offer forgivable grants to first-time and repeat home buyers. The programs are known as down payment assistance programs, and there are more than 500 of them nationwide.
So, if you’re a renter and you’re thinking of buying a home, don’t get discouraged thinking about a down payment. It’s not important that you save for a down payment, necessarily. What’s important is that you select a home that can fit within your budget.
That’s what home affordability is; it’s living comfortably within your budget.
So, talk to a mortgage lender and find out what kind of down payment you’ll need to buy the home you’ve been eyeing up. You can’t know what’s possible until you go and ask.