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Qualify for FHA Loan With Only 0.5% Down Payment
Don’t have the “required” 20% down payment for a home loan? That’s OK, there are many home loan programs that allow you to purchase a property with much less than a 20% down payment.
You may be familiar with the Federal Housing Administration (FHA) or Veterans Affairs (VA) loan programs that require little to no money down for a purchase. However, there are several stipulations as the VA only lends to current or past Veterans and service members, while FHA loans generally require a minimum of 3.5% and as low as .5% down payment which I will explain below.
Homeownership remains a goal for countless Americans who wish to enjoy the many benefits that come along with it. Owning a home provides you with a sense of security that cannot be found elsewhere and is often a sign of personal and financial success.
Buying a home is a sound financial investment and will allow you to enjoy some major tax benefits that will save you money at the end of the year. The interest and real estate taxes you pay annually are major expenses that can be deducted at the end of the year. Stop throwing your money away renting and start building some equity in your new home today!
Low Down Payment (o.5%) Program for Arizona, California, Nevada and New Mexico Buyers
There’s a new program that has been released in Arizona, California, Nevada and New Mexico that allows prospective homeowners to qualify with as little as 0.5% down payment. If you have been shopping for a mortgage and haven’t been able to save the required 3.5%
down payment for an FHA loan, this new mortgage program (which is actually an FHA loan) will lend you 3% of the purchase price. This means that the lender will allow a 1st mortgage up to 96.5% of the purchase price, and the “piggy back” 2nd mortgage will be 3% of the purchase – with the remaining 0.5% provided as a down payment.
The annual percentage rates (APR) ranges from 4.25-5.25% (depending on the borrower’s financial situation) on the 1st mortgage for a 30-year fixed, while the interest rate is approximately 8.25% for the 2nd.
There are several requirements for this new program as borrowers must meet a minimum credit score of 580, have stable income for the last two years and the property must be owner-occupied. This program is currently only available in AZ, CA, NV, and NM and the maximum loan amount allowed is $729,750 – which is going to drop down to $625,500 January 1, 2014.
Benefits of a Low Down Payment Home Loan Program:
- Allows you to save extra cash for other expenses, such as closing costs, furniture/appliances, and relocation costs.
- Prevents you from having to take money out of other assets or investments to come up with a large down payment.
- May provide larger mortgage tax deductions at the end of the year.
- Shortens the time before you are eligible to purchase and will allow you to start building equity immediately.
Please feel free to contact us at 800-779-7547 to get prequalified today! NOTE: Rates will depend on your financial situation – credit rating, loan amount as well as property type will all be contributing factors.
Category: Mortgage payment