3% Down Payment
Low Down Payment Mortgage
Cary, NC
In the world of low down payment mortgage options, few stack up against the conventional 97% mortgage options from FannieMae and FreddieMac.
Find out what makes these two programs great and how you can use them to your advantage when you buy your new home.
3% DOWN MORTGAGE CARY NC
THE 3% DOWN PROGRAMS AND THEIR DIFFERENCES
There are 2 low money down programs offered by FannieMae & FreddieMac to make the path to home ownership easier than ever. Below we'll cover the overview and nuances of both and why you might be better in one of these conventional mortgages vs FHA.
FNMA HomeReady Mortgage Program
Ideal HomeReady Borrowers
- Have low to moderate income
- Are first-time or repeat homebuyers
- Have limited cash for down payment
- Have a credit score ≥ 620; borrowers with credit scores ≥ 680 may get even better pricing
- Have supplemental boarder or rental income
- Are looking to purchase or refinance
FHLMC HomePossible Mortgage Program
- Loan to Value (LTV) Ratios: Low down payment with a maximum of 97% LTV, 105% TLTV, 97% HTLTV for 1-unit properties.
- Property Options: 1-4 units, condos and planned-unit developments; manufactured homes are eligible with certain restrictions.
- Flexible Sources of Down Payments: Down payment can come from a variety of sources, including family, employer-assistance programs, secondary financing, and sweat equity.
- Mortgage Insurance (video): Mortgage insurance (MI) can be cancelled after loan balance drops below 80 percent of the home's appraised value, and MI coverage requirements are reduced for LTV ratios above 90 percent.
- Pricing: Credit fees are capped and less than standard fees for all loans over 80 percent LTV.
- Mortgage Flexibility: 15- to 30-year fixed-rate mortgages; 5/1, 5/5, 7/1 and 10/1 ARMs; super conforming mortgages.
- Refinance Options: No cash-out refinancing option is available for borrowers who occupy the property.
- Income Flexibility: No income limits in low-income census tracts, and otherwise limited to 100 percent Area Median Income (AMI). No geographic limits on loan amounts. Use the Home Possible Income & Property Eligibility Tool to see income limits for specific properties or submit to Loan Product Advisor® to determine Home Possible income eligibility.
- No Credit Score Necessary: Qualified borrowers without credit scores are eligible for mortgages with down payments as low as 3 percent. Learn more. [PDF]
3% Down conventional vs fha loans
There are plenty advantages to the 3% Down Conventional Loans vs FHA Loans for the right home buyers. Of course, when necessary the FHA loan is still a very strong and suitable program but these low down payment conventional loans should be explored first.
Lower down payment
3% Down vs 3.5% down
The low down payment conventional loans require less of a down payment than FHA loans which have always been billed as being the ideal first time home buyer program.
Save on mortgage insurance 2 ways
removable & lower m.i.
The conventional loan programs typically lower mortgage insurance premiums compared to FHA loans and unlike the FHA M.I., it can be cancelled over time to save you more money.
Larger loan amounts
buy the home you want
With HomeReady and HomePossible, the amount of home you can buy is only limited by the income restrictions while FHA loans have a cap on the loan amount making many homes ineligible.
YOUR HOME BUYING MORTGAGE LOAN OFFICER
Choosing the Best Loan Program Begins with Choosing the Best Loan Officer
You can't be expected to learn everything about every program and know exactly which mortgage program is right for you.
That's your loan officer's job to do that for you!
We take care to review your information and determine which programs you qualify for and the pros and cons of each so we can share it with you and help you make the right the choice for yourself.
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