Tag: no down payment mortgage

Buy A House with a Small Down Payment

If you are a first-time homebuyer, getting a mortgage may seem overwhelming — especially with all the different options available. Maybe you don’t have a lot of money for a down payment or your credit isn’t great. The good news is, you can still qualify for a home loan. Here are 4 low or no down payment options that can help you, as a first-time homebuyer, get into the house of your dreams.

FHA Loan

With an FHA loan, all you need is a 3.5% minimum down payment to buy your first home. Because the Federal Housing Administration backs the FHA loan, the qualifications are a bit more lenient. People who have no established credit or small savings for a down payment, and even a credit score as low as 580 can qualify. The FHA loan is also available to immigrants who have a Visa or Green Card, as well as those who have gaps in their employment.

It’s also easier to qualify for an FHA loan if you’ve filed for bankruptcy. With a conventional loan, you have to wait four years after filing Chapter 7 to apply for a mortgage. With the FHA loan, you only have to wait two years. If you filed for Chapter 13, you only have to wait one year. You can also get an FHA loan three years after being foreclosed on your previous property.

VA Loan

The government created the VA loan to provide home ownership to veterans and military personnel. Like the FHA loan, the government backs the VA loan for extra security, so qualifying is easier. To qualify, you must get a certificate of eligibility from the Veterans Administration. Having bad credit may not hinder you from getting approved. VA loans require no down payment or Private Mortgage Insurance (PMI). Veterans can choose either a 30-year fixed VA loan or a 15-year fixed VA loan for up to $424,100. They may also get a cash-out refinance of up to 100% of their home.

USDA Rural Development Loan

For those wishing to buy a home in a rural area, the USDA Rural Development Loan requires zero down payment, making it great for first-time home buyers. The government also backs this loan for added security, so there’s low or no PMI attached to it. You only have to pay a 1% guarantee fee upfront and 0.5% each year after that. That’s less than the 1.75% up front and 0.85% each year with the FHA loan. If you’ve recently filed for bankruptcy or were foreclosed, you won’t have to wait too long to qualify for a USDA loan.

Conventional 1% Down Mortgage

Important Update! Last date for loan submissions is 5/31/2018. Program is being discontinued.

Riverbank Finance offers homebuyers a way to put only 1% down on a home and still get a conventional mortgage. In this case, the home buyer puts 1% down and the lender (Riverbank Finance) contributes 2%, giving home buyer 3% equity when closing on the home. Freddie Mac created this option to make homes more affordable for new buyers. It allows people to buy a new home for, essentially, the cost of one month’s rent and avoid PMI altogether or drop PMI in the future. Your 1% down payment may be a gift from someone, you must have at least a 700 FICO score, and your debt-to-income (DTI) ratio is limited to 43%.

For more information or to speak with a loan officer about any of these mortgage options, call Riverbank Finance at (800) 555-2098.

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USDA Lowers Upfront and Annual Fees for RD Loans

USDA Lowers Fees for RD Loans

Great news for homebuyers considering a USDA rural development home loan (RD Loan)!  The already popular zero down mortgage is getting even better. The USDA announced this week that they will be decreasing both the upfront guarantee fee—a closing cost which is financed into the total loan amount at close; and the annual fee—the USDA version of PMI, which is paid monthly.  Effective October 1st, the first day of fiscal year 2017, the upfront guarantee fee will decrease from 2.75% to 1%, and the annual fee will decrease from .5% to .35%.

Now, unless you spend your spare time studying loan program guidelines, that might sound like gibberish—so let’s do some math to show the savings.  On a $200,000 home purchase, the upfront guarantee fee would decrease from $5,500 to $2,000 and the annual fee would decrease from $83 to $58.  That is a savings of $3,500 on the total loan amount and $25 per month over the life of the loan!

Requirements for a USDA Rural Development Loan

You might be thinking, that’s great, but how do I know if a USDA rural development loan is the right fit for me?  I’m glad you asked!  Qualifying for a USDA RD loan is very similar to an FHA mortgage, but requires no down payment and has two important requirements for income limits and location.

Traditionally, when purchasing a home with less than 20% down, most loan programs require private mortgage insurance (PMI) to be added to your monthly payment.  For this reason, USDA loans are more favorable, because their annual fee of .35% is significantly smaller than the .85% required for FHA loans.

Have a specific scenario you’d like to run past us?  Give us a call to speak with one of our licensed loan officers, or check out our USDA Mortgage Calculator.  We would love to recommend the best loan program for you and your situation.

Apply for a Rural Develoment Mortgage

Buying a home with no down payment has never been better. Call Riverbank Finance today at 1-800-555-2098.

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Buying a foreclosure home for sale

Foreclosures selling fast and at 20% Off

Finding a good deal on a home is not as easy as it used to be.  The housing market has started to recover and pick up steam.  Homes for sale are starting to receive multiple bids now instead of not receiving any bids.  The Nation Association of Realtors has recently stated though that a potential homebuyer can find a deal on foreclosed homes still or a distressed and that discount is averaging about 20% right now.  This is obviously very attractive the all potential homebuyers.

Foreclosures down 25% year over year from 2012

A foreclosure tracking company named Realty Trac, has recently stated in it’s February monthly report that there were 154,000 foreclosure fillings in February.  In this case a foreclosure filling is defined as any of: A bank repossession, a scheduled auction for a home, or a default notice on a home.

The important part of this foreclosure filling is looking at the specific numbers associated with a default notice.  Default notices are defined as homeowners who are 90 days late on their payment.  Once a homeowner becomes 90 days late on their payment mortgage contracts allow lenders to start the foreclosure process.  So default notices are important to track because it typically shows how many upcoming foreclosed homes there will be on the overall market down the road.  If there are fewer and fewer foreclosed homes ready to hit the market it’s safe to assume that the discount now available on foreclosed may become less and less in the future. With not as many ready made deals on the housing market this could further constrain the over all market.

The housing supply is shrinking 

Since late-2011, the U.S. housing market has charted a slow, steady recovery. Low home prices and low mortgage rates, plus the availability of low- and no down payment mortgage programs have helped to build a strong foundation nationwide.

Some cities have shown massive price gains, while some, show little gains at all. Most U.S. markets, though, are benefiting from a combination of a stronger national economy, of rising costs to rent, and of general consumer optimism.

Another telling point : More people believe that “now is a good time to buy” as compared to those who believe “now is a good time to sell”. Buyers see bargains as compared to where home prices may head. Sellers, by contrast, see a light at the end — if they can just wait long enough to list.

The result has been a drop in the supply of homes for sale. At the current pace of sales, today’s entire stock of U.S. home resales and new construction homes would be sold out by July 31, 2013.

Where are all of the Foreclosures

Foreclosures generally area double edged sword.  On one side, they are a bad indicator for the overall economy in that area. On the other side, plenty of foreclosures available can help spurn first time home buyers or real estate investors to get off the fence and buy.

If you may be interested in buying a foreclosed home let me help you figure out where a large supply of foreclosed homes are. Realty Trac has recently stated that the state with the most foreclosed homes in it is Florida (13,042).  Florida has about twice as many foreclosed homes then the next state which is California (6,549). The third state on the list is Illinois and this state has 5,106 new foreclosure starts.And, of course, like all else in real estate, foreclosures are local. In some states, foreclosures are more common than in others.

Here are the states with the lowest amount of  foreclosed homes Vermont, Montana, and Washington, D.C.

Can I afford to buy a Foreclosed Home?

Homebuyers have many options to put low down payments.  One popular mortgage product for first time homebuyers is a FHA loan which only requires 3.5% down payment.  Other popular options which include no down payment are VA or USDA loans.  On other popular mortgage loan for first time homebuyers is 3% down Conventional loan.  If you have thought that the time is right to buy a foreclosed home call Riverbank Today at 800-555-2098.

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National mortgage Settlement BalalnceIf you or someone you know has been feverishly looking for a home to purchase using the MSHDA Grant for first time home buyers then you luck may have run out.  MSHDA unexpectedly announce the exhaustion of grant funds for first time home buyers using the $3000 credit on Wednesday the 27th at 5:00PM.  Earlier in the week they sent a memo out to banks and mortgage companies announcing the final request date to be March 29th at 5:00PM however to unexpected demand for funds, they had to end the program early.

**NOTE: Grant applications are still being accepted for the $5000 credit for military veterans. Call for details.

Now the the funds are gone you may need alternatives to the grant money.  We are offering our clients no down payment mortgage options and addressing buyers case by case.  Rather than using the funds for use as a down payment, home buyers may be eligible for zero down loans which accomplish the same goal; no money out of pocket.

Additional alternatives to the grant funds include seller concessions with purchase offers.  Although buyers may have limited funds saved, they may not have enough to cover both the down payment plus closing costs of a new home purchase. When placing an offer on a home, requesting that the seller pay closing costs may be the key to home affordability.

Lastly, clients may be able to receive lender credits or money to be credited from the bank or mortgage company to cover the expenses of buying a home. For more information on this program read our recent article on Tips for Cheap Closing Costs for Buying a Home.  This article explains how, if a buyer is working with a flexible lender, they may have the option of a zero cost loan where the mortgage company would credit back money to cover all closing costs and possibly even prepaid items such as taxes and insurance.

Alternatives to First time home buyer MSHDA grant

To discuss additional options and eligibility for zero down loans, call a Riverbank loan officer today at 800-555-2098 or request information below.

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