La Canada Flintridge & La Crescenta Real Estate | Harb & Co.

Low Down Payment Loans are back but who do they help?


Now that real estate prices have rebounded, low down payment loans are back. I really don’t understand why there isn’t more griping over the fact that while real estate prices are low, loans are difficult to come by. But as soon as values reach the near breaking point, all types of new opportunities arise for those who have less means.

Lenders are now making loans with as little as 3% down payment (conventional), maximum loan amount of $417,000.  But with the average sales price of $700,000+ for La Crescenta homes, 800,000+ for homes in Pasadena, $1,500,000+ for La Canada homes and $750,000+ for homes in Glendale, this is a non-event for those seeking to purchase a single family home in the more desired Los Angles neighborhoods.

Down payments of 3.5% for FHA loans continue to be available for loan amounts to $625,000.  And the mortgage insurance premium paid by the buyer has been decreased. But, home buyers with lower down payments, especially those seeking FHA loans are typically low man on the totem pole when it comes to having an offer accepted in a multiple offer situation.

And the bottom line: The lower the down the higher the monthly payment.