Record low mortgage rates have made the transition from renting to homeownership easier than before. By locking in a low rate on a home loan, renters can achieve a similar monthly mortgage payment to what they were paying in rent. The struggle for many renters, however, remains coming up with a down payment.
According to a recent post from the National Association of Realtors’ Economists’ Outlook blog, 38 percent of renters can afford to purchase a home but would need over a decade of savings to come up with a 10 percent down payment.
Fortunately, low down payment programs like an FHA loan allow home buyers to purchase a home with as little as 3.5 percent down. A smaller down payment may cause monthly payments to increase but qualified buyers can find some of that increased cost offset by locking in a low mortgage rate.
Today, conforming no-point 30-year fixed mortgage rates are averaging 2.875 percent and 15-year rates are near 2.375 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.