Can you really own a home with 3 percent down?
Yes, yes you can!
The 3 percent down payment option is similar to existing conventional loan programs with much higher requirements. This program, however, can better serve first-time homebuyers because of the following.
- The mortgage provides the security of a fixed-rate loan.
- The property can be a one-unit single family home or condo.
- At least one borrower has not owned a home in the last 3 years.
- The property will be the new owner’s primary residence.
- The loan amount is below $453,101.
According to the National Association of Realtors, the average home price is around $250,000. The 3 percent down conventional loan is a great way to expand homebuyers purchasing power.
According to Fannie Mae’s Loan Level Price Adjustment (LLPA) graph, borrowers can have a score as low as 620 to qualify.
Interest rates can be appealing as well.
These loans include rates only about one-eighth to one-quarter of one percent higher than rates available to borrowers putting 5-10 percent down.
Is it worth it to try and save more? The time it takes to save an extra 2 percent for a larger down payment could mean higher home prices and tougher qualifying conditions in the long run.
Are you ready to find out your options? Contact one of our Loan Officers to learn more.
This blog post was written by experts at Mortgage 1 and originally appeared on www.mortgageone.com. Michigan Mortgage is a DBA of Mortgage 1.