Many people delay buying a home until they have saved 20%
for there down payment. That is not necessary with several No to Low Down Payment
options available to home buyers.
It’s true if you put down 20% your payment will be lower,
but most don’t have that much in savings and if you do, do you really want to
spend it all and put your financial health at risk. If you are like most people saving is very hard. Doesn't mean you can't make a monthly house payment. Putting off buying until
you can save 20% will most likely cost you more with increasing home values and
increasing mortgage rates. Here are a few loan programs that are available now.
USDA – United States Department of Agriculture Rural Housing
Loans offers 100% financing. You will be surprised to hear it’s not just a farm
loan. You can use USDA home loan on many types of property, like condos and
townhomes as well as residential homes. You can plug in any address to see if
the property qualifies at USDA
Property Look-up
USDA does have income limits, but most people will qualify. You
can see if your income meets the requirements here USDA
Income Limit- Look-up
Mortgage insurance is much lower on a USDA home loan, making
this loan the most affordable home loan option.
VA Home Loan offers 100% financing for members of the Military
and their surviving spouse. VA guarantees the loan and will repay the lender
making the loan if they have met the VA guidelines.
There is a VA funding fee that is financed within the loan
and all closing costs can also be incorporated into to loan. Making this a true
100% loan. There is NO mortgage insurance on a VA home loan.
The 2019 VA loan limit increased to
$484,350 from $453,100 except in 199 high cost counties where they are higher. You
can check out the loan limits by county
FHA – Federal Housing Administration is the largest mortgage
insurer in the world, offering a 96.5% loan with 3.5% down payment. There is
mortgage insurance (MI) of 1.75% upfront that is added to your loan and a
monthly MI of .85% if the loan is at 96.50%. MI will remain on an FHA loan for
the duration of the loan. You will need to refinance or sell to cancel the MI. Seller
can contribute up to 6% of the loan amount as a credit, this can be used to cover
your closing costs but not your down payment. Your down payment can be gifted
completed or partially by a relative or third party.
If a lender funds according the FHA guidelines, then
FHA will guarantee the loan making qualifying a bit easy with lower credit
scores down to 580 for most lenders.
Fannie Mae Home Ready Loan Program with 97% financing
with a 3% down payment. A great alternative to FHA. Income
limits do apply and you can look them up here Income Limit Look-up
This loan program does require Mortgage Insurance but once your home has 20% equity you can request it to be removed, unlike FHA.
This loan program does require Mortgage Insurance but once your home has 20% equity you can request it to be removed, unlike FHA.
There is a homebuyer education requirement to insure
you know the process and what to expect financial as a new home owner. You can
take this course online or in person.
Freddie Mac Home Possible offers 97% financing with a
3% down payment. This product feature very similar guidelines as the Home Ready
program. MI can be removed once equity reaches 20%. Non- occupying co borrower
is allowed on a 1-unit residence. Now you can even add sweat equity for your down
payment and closing costs.
This is another great option for the right buyer.
Conventional Financing at 97% with a 3% down payment
is another option with all the same guidelines as a normal conventional loan
but it will have mortgage insurance based on your fico score, debt to income
ratios and property zip code.
Down payment assistance programs are also available in
most cities, counties and states. Check your state and local area to see what is available
and what guidelines are required. You will be surprised that most people will
qualify for some type of assistance. Need help give me a call.
To get started to see if you qualify for any of the
loan programs go to www.roxyloans.com
and click on apply. Once you complete the application, I will give you a call.
If you want to call me first, please do!
For more information please
contact me at 808-457-2455.
Thank you for visiting my blog, I encourage you to leave a
comment or questions. Let
me know if my blog has helped you. I would love to hear your thoughts and any
ideas for future posts.
Roxy Redenbaugh
ACMC Loan Consultant
Mortgage Coach
Branch Manager
NMLS #269926
