Hello and Happy New Year to all of my friends, clients and business partners! With the first week of 2015 in the books, I’d like to take this opportunity to update everyone on what’s new in the mortgage world. There is one exciting announcement in particular that will make home buying far more feasible for First -Time Home Buyers who don’t have much saved for a down payment:
Fannie Mae now offers Conventional financing with a down payment of only 3% of the sales price! Let’s face it, the primary barrier to homeownership for First-Time Homebuyers is saving money for down payment and closing costs. These FTHBs now have an option other than FHA to realize their dream of homeownership! Below are some key facts and benefits of this program:
1. In most cases, mortgage insurance rates will be far less expensive for this program when compared to those required by FHA. Also, FHA borrowers are required pay the mortgage insurance for the ENTIRE LIFE of the loan. With this Conventional product, buyers are only required to pay mortgage insurance until the home reaches 80% loan-to-value, so long as at least 12 months have passed sine the start of the loan.
2. For the buyers who are in the market to purchase a condominium, the hassle of finding an FHA approved complex is eliminated! All of my Realtor partners out there know that FHA approved condos are few and far between. This expands the pool of eligible properties tremendously for the FTHBs with low down payments.
3. This program is NOT ONLY for FTHBs with perfect credit. Fannie Mae will allow an minimum FICO score of 620.
4. The entire 3% down payment can come from a gift from a family member. In the past, at least a portion of the down payment would have to come from the buyer’s own seasoned funds. This is no longer a guideline that could stand in the way of a FTHB who has found the perfect property but has to delay pursuing it until enough money was save.
Please don’t hesitate to call or email ANYTIME for more information on this program OR anything else related to mortgages. I’m always available as a resource VERY happy to help!
Make it a great 2015!!!
Paul & Rachael,