- Posted by: steve
The myths surrounding a low down payment mortgage!
One of the biggest misconceptions prevalent with first time home buyers is that buying a home requires a 20% down payment. In fact, there are a variety of low down payment mortgage programs available with little or no down payment. Each program has very specific documentation and credit score requirements. Below is a brief description of each program and some basic information on each. If you are looking for a low down payment program, please consult an experienced mortgage professional.
100% Financing Programs
VA loans are available to certain qualified Veterans. The program offers 100% financing with very flexible guidelines. Interest rates are very competitive and the loan has certain protections built in to help the Veteran.
USDA loans are available in certain rural areas. This program has very strict guidelines regarding reserves and qualifying ratios.
1% Down Program
The 1% down program is a conventional program where the buyer puts 1% down and the lender provides a gift at closing for an additional 2%. The borrower ends up with 3% equity in the property the day of closing. This program requires excellent credit scores. In many areas, the borrower needs to meet additional income restrictions. This loan also comes with reduced Mortgage Insurance expenses and very competitive interest rates.
Buying a new home has never been easier with the new low down payment mortgage options at NFM
Watch The 1% Down Mortgage Video
Buying a home is never been easier, introducing conventional 1%, down with equity boosts. Here’s how it works. You put down 1% your lender contributes 2% for the down payment, giving you 3% equity in your home, then you finance the rest through a conventional loan with the option to avoid monthly PMI and still get a great rate. It’s an exciting new option for just about anyone looking to buy a home.
3% Down Payment Program
Offered through both Fannie Mae and Freddie Mac, the 3% down program is much more lenient than the 1% down program. The credit score requirement is much lower. This program also offers excellent rates and very affordable Mortgage Insurance rates.
FHA – The Federal Housing Administration
The most powerful loan program ever created, the FHA 203b program allows prospective homeowners realize their dream of home ownership. FHA has the most flexible underwriting guidelines. Interest rates are typically the lowest of all products, although the mortgage insurance costs are typically high.