Many people are not sure what “housing affordability” means, or how it affects their mortgage, housing payments or home values.
Let’s start with some of the latest stats on Housing Affordability:
- The monthly mortgage payment for a median-priced single-family home is now $700, compared to $1,140 in 2006 — a decline of nearly 40 percent!
- Mortgage payments now account for only 13 percent of monthly median family income, the lowest percentage on record (since 1971).
- Price declines and low mortgage rates have resulted in a ratio of monthly mortgage payments to median family income that is the lowest on record.
If you are a potential seller, one consequence of this record affordability is that you may be able to sell your home to a home buyer who would not have ordinarily been able to afford your home a few years ago. While the overall housing market is still struggling, the increase in housing affordability is seen as a bright spot for people now looking to sell or buy a new home.
If you need a mortgage in this climate, do not be deterred by various media reporting that you need a 20% down payment to qualify.
You don’t always need 20% down to qualify for a mortgage:
Many people do not realize that funding sources exist from the FHA, RD, VA and VHFA that still allow for low, or even no, down-payments. In addition, if you have good to excellent credit, you can also get ‘conventional’ mortgages with as little as 5% down by utilizing Private Mortgage Insurance (PMI).
If you would like to take advantage of the record housing affordability, and would like to know what your payments would look like, give me a call today at 802-658-5599 or check in with me online at www.vtmortgageadvisor.com.
Vermont Mortgage Advisor