How to Qualify for Low Down Payment Home Mortgage
Published By: Meray Gregory
Today we’re sharing about what it takes to qualify for a low down payment home mortgage. As Santa Clarita realtors, we know how difficult it can be to qualify to buy your first home. It’s even more of a challenge to do so without entirely breaking your piggy bank! If you’ve been window shopping for homes and saving your money for a down payment, you’ll want to read below to hear what it takes to qualify for a low down payment home loan.
Common Challenges for New Home Buyers
In order to obtain a home mortgage you must first meet all the lender requirements to qualify for your home loan. Once you meet these strict qualifications you usually need a large sum of cash to put towards the down payment! Coming up with the cash for the down payment is usually what prevents otherwise qualified home buyers from getting into their first home.
Thankfully, there are now multiple low down payment home mortgage options available, especially for first time home buyers! By the way, in todays real estate market, before making a purchase offer on a home, you’ll need to get pre approved first.
Low Down Payment Home Mortgage Help
We recently received a newsletter from our preferred lenders, Wintrust loan officers Keith and Jason Renno. They reported how Freddie Mac has updated guidelines to allow for a 3% low down payment home mortgage. Thanks to Freddie, this is a wonderful option and is sure to help some of our new home buyers to get into their first home.
We’re also pleased to hear about changes with Fannie Mae because will also with 3 percent low down payment home mortgage. For those fitting the Fannie Mae guidelines this will make the dream of homeownership more achievable than ever! Below are some highlights of the Fannie Mae program.
Fannie Mae Low Down Payment Home Mortgage Requirements
Fannie Mae allows loan to value ratios greater than 95% up to a maximum of 97% for loan amounts of $417,000 and under. This is really important for new buyers who might be strapped for cash to put towards a down payment.
See below just a few of the highlights and requirements for a low down payment home mortgage.
- At least one borrower needs to be a first-time home buyer on a purchase.
- All loans must be fixed-rate and secured by a one-unit principal residence.
- Allows for limited cash-out refinances of existing Fannie Mae loans.
- Manufactured housing is not permitted.
- All loans must be underwritten with DU.
- In addition, Fannie Mae will now allow reserves to come from gift funds. We really like this!
Please keep in mind, the list above does not display all of the requirements so it’s important you meet with your Realtors and their preferred lender to find out all the latest.
Look at the Numbers for a Low Down Payment Home Mortgage
As an example, set’s say you searched for home and identified one which you decided to buy! If the amount of the home is $300,000 and you only needed a 3% down payment, your low down payment for your home mortgage would be less than $10,000. Yes, there are some other costs, so let’s say the amount ends up being $11,000. Now, what if you only had $8,000 available? Well, with the Fannie Mae changes you can accept a gift from a friend or family member to make up the difference!
Connect With Matt and Meray Gregory
If considering buying a home but have limited funds, we can help. Working together with our lenders, we have helped many first time home buyers buy a home with a low down payment home mortgage. We’ll personally introduce you and help you determine your lending options. Then, we’ll provide you with all the home buying resources you’ll need to help you find and buy your home.
We are committed to helping our buyers find and buy that perfect home. Our mission is to be your Realtor for life, not just one transaction! When you choose the Gregory Real Estate Group, we’re watching out for your interests 24 hours a day and 7 days a week, for life!
Get started buying your home with a low down payment home mortgage, today.
Matt & Meray Gregory