Which low down payment loan is best for you?
With the FHA and the Obama Administration working in tandem to open more doors for those looking for a home loan, the number of low down payment loans available continues to grow. With multiple options for a low down payment available to borrowers, the days of being locked out of homeownership due to not being able to access a large sum of money are quickly fading. The market is becoming more competitive: low interest rates, more loan options, and home prices are still low. This is good news for buyers.
So, what low down loans are out there? And which one is best for you? While this process always starts with speaking to an experienced mortgage specialist about financing, it can also start with knowledge. Cause, you know – knowledge is power, or in this case makes homeownership seem possible to those who don’t have access to tens of thousands of dollars in one go. Yes, first-time and Millennial buyers, we’re talking to you.
Fannie and Freddie
While Fannie and Freddie got a bad rep in 2008, they recently announced a new 3 percent down payment option for Conventional Loans. Yup, you heard that right – you only have to put 3 percent down for a down payment on your home with this loan program. While this down payment doesn’t include escrow or closing costs, it’s significantly less than the 20 percent down normally associated with Conventional Loans.
When it comes to opening doors for borrowers, nobody does it like the FHA. With housing recovery in the forefront of their initiatives, the FHA insures loans for lenders, giving them an incentive to offer responsible lending. While there are a variety of low down FHA loans available, their First-Time Homebuyer Loan program is the most popular amongst new buyers. Why? Well, this loan offers low down payment options, landing at 3.5 percent down. It also has looser lending restrictions, and another little nugget… The FHA recently announced that they are reducing annual premiums for new borrowers by a half of a percent. According to the FHA, this initiative will make homeownership more affordable for over two million Americans in the next few years. This reduction is also expected to lower the overall cost of housing for homes purchased through the FHA program. Not bad, right?
Now that you know about the most popular low down options out there, you have some conversations and math waiting for you. When it comes to finding the best loan option for you and your financial situation, sitting down with an experienced Loan Officer will give you the opportunity to compare and contrast. At Housing Buzz, we are here to help you with that math to find the right financing for your needs. Have questions? Good. Contact the Housing Buzz team today and let us help you find the right loan program.