If you’re in the market to purchase a home with less than 20% down, following is some very useful information. Brenda Alfano of Absolute Mortgage does a great job of sharing her wealth of knowledge in layman’s terms.

Wow, is it October already?!? So last month I mentioned that I would talk about Purchase 1st Mortgage options that do not require a 20% down payment – so here they are:

CONVENTIONAL
A Fannie Mae or Freddie Mac Conventional 30 year fixed mortgage requires as little as 5% down payment, a bit easier to come up with than 20% down, don’t you think?

Depending on your income you may qualify for a My Community (a Fannie Mae loan program) mortgage that only requires 3% down in many cases.

With either of the above mentioned options, you will be required to purchase Private Mortgage Insurance. Cost of this depends on the Loan to Value (LTV) and your credit score.
Conventional loans are greatly driven by the credit score of the borrower.

GOVERNMENT
Loans in this category are not given by the Government, just either insured or guaranteed by them.

FHA – Requires 3.5% down payment and also has upfront and monthly Mortgage Insurance.

USDA – 100% financing with an upfront funding fee allowed to be financed into the loan and an annual fee paid monthly. This program is driven by income and location of property to qualify.

VA – for the eligible American Veteran and their surviving spouses (if they have not remarried). 100% financing, an upfront funding fee allowed to be financed into the loan and NO other mortgage insurance. Limited closing costs allowed to be paid by the Veteran. Truly a great loan option!

These are the basics – many banks or mortgage companies have proprietary programs with their own guidelines so you might want to check into those options also.

Until next month, have a ghoulishly good Halloween!

Brenda Alfano
NMLS#229897
425-330-2039
http://balfano.absoluteloans.com
Absolute Mortgage, a division of Pinnacle Capital Mortgage Corp, nmls81395