As a realtor, navigating the mortgage market with my clients can feel overwhelming, even for
experienced homebuyers. I always recommend exploring various mortgage options to make an
informed decision. Here are four important points to discuss with a mortgage expert:

The 20 percent down payment myth: Contrary to popular belief, a hefty 20 percent down
payment is not always necessary when purchasing a home. For instance, Federal Housing
Administration (FHA) loans offer a minimum down payment of 3.5 percent. If you're buying a
$300,000 home, a 3.5 percent down payment would only require $10,500 instead of the
traditional $60,000 (20 percent).

Several lending sources: Banks and credit unions are not the sole options for obtaining a home
loan. Consider exploring savings and loan associations that use private investors' savings
deposits to provide mortgage loans. These associations are often locally-owned, federally or
state-chartered entities. Mutual savings banks, designed to assist low-income consumers, are
another viable alternative. Unlike commercial banks, they can access funds from the Federal
Home Loan Bank System for mortgage investments.

Loan amount and affordability: Lenders typically determine the loan amount you qualify for
based on your repayment capacity and the home's cost. It's important to note that this approved
loan amount may exceed what you can comfortably afford. While new laws hold lenders
accountable, larger loans are still feasible for most individuals. It's crucial to evaluate your
day-to-day finances and ensure you stick to a loan that aligns with your affordability. This may
also provide room to cover closing costs or consider purchasing a larger home.

Financing home repairs: If you opt for an FHA loan, you can take advantage of the 203(k)
program. This program allows borrowers to allocate up to $35,000 from the loan for necessary
home repairs and improvements. Whether you want to replace carpets or repaint, this add-on
loan product can cover the costs. The total loan amount is determined based on the projected
home value after the planned fixes are completed.

Remember, consulting a mortgage expert will help you navigate these aspects and find the best
mortgage solution tailored to your needs.

RAISING THE BAR FOR REAL ESTATE SERVICES

CONSIDER: Since I'm not a lawyer but your neighbor Realtor Associate, you should consult an attorney and your CPA before making any decisions. Let’s start working together. Reach me at 305-776-5677 or register at www.juanmestre.com or email mestre.j@ewm.com. Sourced and digested from several locations including but not limited to: RisMedia for BHHS.com/blog, EWM Realty, Data from NAR & my knowledge