It’s Finally Here! Now You Can Buy a Home With Only 3% Down!admin
Fannie Mae loosens mortgage guidelines, Lowers down payment requirements. If you have been struggling to save a down payment to buy your first home then your struggles are finally over!
In early December of 2014, Fannie Mae finally announced the exciting news that many people, including ourselves, have been eagerly waiting for. They unveiled a new program that is aimed at putting even more people into their first homes while saving them lots of money. Thanks to this exciting and unheard-of program, first-time homeowners will need to come up with significantly less of a down payment which means you will be able to enjoy homeownership much more quickly.
New Option for Those Who Need it Most
Low and middle income families often find themselves unable to save up the necessary funds for a down payment for a traditional loan.
Many lending institutions required at least 5% for a down payment. With Fannie Mae’s new program, though, you will be able to take advantage of the 97% loan-to-value ratio. This requires only 3% of the purchase price to be used as a down payment.
Other programs, such as FHA loans, do offer homeowners favorable terms. This newest and long awaited Fannie Mae program keeps even more money in your pocket, right where you need it. While the interest rate charged by Fannie Mae’s new 3% down payment program is slightly higher than what an FHA loan is, you will still be able to save money on two fronts. You will have less of a down payment to come up with and your monthly payments will be lower as well. The handy chart illustrates exactly how this program works.
|97% Conv LPMI||95% Conv LPMI|
|Down Payment Required||$7,000||$6,000||$10,000|
|Principle & Interest Payment||$854||$971||$922|
|Mortgage Insurance Payment||$136||$0||$0|
Saves Money While Putting People in a Home More Easily
For example, for a home that costs $200,000, Fannie Mae requires only 3% of that amount as a down payment which is $6,000. A FHA loan, on the other hand, requires 3.5% as a down payment which is $7,000. That one-half of a percentage point might seem insignificant, but in the case of purchasing a home in this scenario, it is equal to $1,000. This is a significant amount for low and middle income families and can mean that you can finally get into a home.
Where to Find Help
Buying a home is an exciting time in your life. It also involves many questions and considerations to determine what is the best loan option for your needs. If you have been thinking about purchasing a home in 2015, contact Anthony VanDyke today to start the process and discuss the options available to you.