Tego Venturi: I’ve heard this and I don’t know why this keeps coming up, but why people think you need 20% down to buy a home?
Tracy Venturi: You know, I heard people this week, somebody on our team asked the rest of them, said, how do I tell somebody, no, you don’t need 20% down to buy a home. And I’m like, really people still think that, and this was millennial, this was millennials that felt like you couldn’t buy without 20% down. And it wasn’t wise, even if you could buy with less than 20% down,
Tego Venturi: If you’re a fan of Dave Ramsey. And obviously the financial guy, I mean, he, I mean, that’s his thing, right? He says, put 20% down and do a 15 year mortgage. Now, I don’t know if he still believes that with a 3% interest rate, the money is so cheap. I mean,
Tracy Venturi: Yeah. He doesn’t believe in debt. He doesn’t, he doesn’t believe in debt or credit cards. Right. So it depends on who you’re listening to.
Tego Venturi: Part of his thinking is he deals with so many people that get themselves in trouble with debt. That may be that’s part of his paradigm.
Tracy Venturi: I think he realizes there are a lot of people who can’t manage a credit card or finances. And so they just have to like, not, it’s just cut it, cut it all off and pay it all down. And don’t open up credit cards again or have debt, however, with interest rates at 3% and sometimes below I don’t know, locking in a, a monthly mortgage rate right now, even if prices are up is still a great time to be a buyer.
Tego Venturi: I think so. And, and I, you know, had this conversation with another realtor that was saying, well, what do I do? You know, I don’t know how to tell my buyers because I’m afraid they’re going to overpay. And then I’m going to have to sell the home for them last year. And I’m like, well, hold on a second. Do they need a place to live? Is this is what homes are selling for right now. Okay. Do we know what’s going to happen in the future? You know, so I mean, it’s like, it’s tough. Cause Tracy, we went through 2009, 2010, 2011, when people were having to sell their homes for $50,000 less than they paid for them. Right. I mean, we saw some of that. I just do not see that in the card anytime in the next few years, I just don’t. I mean, we’re going to have a slowdown. Absolutely. I just don’t see a big decrease in home prices anytime soon.
Tracy Venturi: Right. So it’s a big myth, 20% down for buying a home is a big one.
Tego Venturi: I really took that off track time. Yeah. Yeah. Getting back to where we were getting back to what we were actually talking about. So this study, Tracy want to talk about that it was a profile of home buyers and sellers that the national association does. And they said, you know what, actually people really put down
Tracy Venturi: And what they really put down first time, home buyers, about 7%, which is interesting because three and a half percent down is an FHA borrower loan minimum. And a lot of first-time home buyers are FHA borrowers with 3.5% down. But that means there’s a bunch of them that are putting 10% or more down, which is great. And hopefully, hopefully families are helping them if they don’t have more than three and a half percent down and they’re gifting them that money so that they can have more equity in their homes. Because yeah, I’m saying if you’re in a position to give to what a better gift you can give your child than to build wealth through you know, through real estate all home buyers though, it’s a average of 12% down, down payment. So the 20% hasn’t come in yet 20% doesn’t even come in with repeat buyers they’re at 16%.
Tego Venturi: Yeah. So it’s interesting. And you know, the reason and just to clarify, why somebody would want to put 20% down is because of mortgage insurance, right.
Tracy Venturi: For some loan programs. So mortgage insurance is something that’s insurance, that’s money that’s paid. Every time you pay your payment, that’s given to a company that’s insuring to your lender, that if you default and stop paying there, they’re responsible, not the bank or the lender.
Tego Venturi: Right. Right. And so, you know, that financially, that does make sense. Because you, now, you’re not having to pay that if you have the wherewithal to come up with the 20% down payment.
Tracy Venturi: Right. But there’s the great VA loan, right? The, the VA loan is the best loan out there. And there is no mortgage insurance on that. And that, and there shouldn’t be no, it’s a benefit to our veterans that qualify for a VA loan. There is no down payment required and no mortgage insurance. So it’s a great loan. Great, great. Yeah.
Tego Venturi: That, that is by far the best program out there and not everyone qualified, not everyone qualified to do your time side note, Tracy, what other, I’m going to do this as a, as a, as a, as a jeopardy question test. What other program in New Mexico is available for zero down payment and they are out there.
Tracy Venturi: I know the answer, it’s the USDA for rural areas in some rural areas are in Sandoval County are in Valencia County are in Torrance County. Yep. I don’t know that there’s any in Burnham,
Bernalillo County, but Santa Fe County. So you get out to Edgewood. If you go to the East mountains, Moriarty you know, down South, like you said, there’s, there’s areas where you can get those USDA programs in there
Tracy Venturi: Might be better to do the FHA though, versus that, you know, it just kind of depends, but getting a great lender to help, you know, the difference and pick, help you pick which loan program, you know, a lot of times buyer buyers have no idea, you know, that there’s all these different loan programs and it takes a really good lender to talk with them, to find out what product is going to be right for them.