Recent surveys have shown that the number of owner occupied households grew faster than renter households in the first quarter of 2016 (850K owner vs 365K renter). New research also revealed that, because of rising rents (avg. median rental now $1416 nationally), many renters don’t realize that they could actually own their own home for the same amount of money they are currently paying out monthly on rent and maintain their current level of expenses while building equity by
owning their own home!
The one major consistent barrier in making the switch to homeownership though continues to be the down-payment needed for most conventional loans and most renters don’t believe they can come up with the necessary down money, but there’s GOOD NEWS for those renters who fall into this category!
There’s a brand new Freddie-Mac approved only ONE PERCENT REQUIRED from Purchaser program with NO PMI.
Now, renters who have a middle FICO credit score =>700, can use their rental security deposit as their 1% required for this new purchase program (ie: if renting for $1400/mo, put $1400 up as the required 1% on a $140,000 home). If you do the math for an average 30 year fixed rate on this program including estimated real estate taxes and home owners insurance, the monthly purchase payment would come in right around $1150/mo total! This also gives the renter an additional monthly savings of $250/mo to put towards house-hold incidentals and the closing costs can even be covered with a sellers concession or gift from a relative!