Zero-Down is Great, But Won’t Ease Housing Crunch

Miramontez: “The affordability index has reached a low of 21% in Orange County, the lowest in all of Southern California. And it’s not just the homebuying part, but rental rates are going up, too.”

SANTA ANA, CA—Products like Orange County’s Credit Union’s conventional zero-down and 3%-down mortgages may help some people buy homes, but it won’t do much to ease Orange County’s lack of multifamily supply or rising rental rates, VP of mortgage lending Carlos Miramontez tells GlobeSt.com. Orange County’s Credit Union is one of the only lenders in the county to offer both conventional zero-down and 3% mortgage for its members, making buying a home seem more possible for Millennials in Orange County and the surrounding areas.

With starter homes costing around $500,000-plus, putting tens of thousands of dollars down upfront is not always an option for first-time homebuyers, and solutions like co-borrowing are increasing in prevalence as first-time buyers struggle to become homeowners. As Daren Blomquist, SVP of ATTOM Data Solutions, told GlobeSt.com in September, one of the advantages of co-borrowing is, “You may be able to qualify for a loan to buy a home that you might otherwise not qualify for on your own. Our data shows the presence of a co-borrower also helps to reduce the interest rate—the average interest rate on Q2 2017 loans with co-borrowers was 4.11% compared to 4.28% for loans without co-borrowers—which can lower the monthly mortgage payments, making the home purchase more affordable. A co-borrower situation can also involve the co-borrower contributing to the down payment, which also lowers the monthly mortgage payment.”