low-down-payment

There’s a new down payment program that’s taking the mortgage industry by storm. Earlier this year, Fannie Mae and Freddie Mac announced a new conventional loan program that allows homebuyers to purchase a house for as little as 3% down. Couple this low down payment loan with historically low interest rates, and you’ll quickly understand why experts are calling 2015 the year for first-time homebuyers. 

Who is this program for?

Geared toward homebuyers who may lack the resources to save for a large down payment, this new 3% down payment program reduces the upfront cost of purchasing a home. With a smaller upfront investment required on behalf of the buyer, housing is made more affordable and put within reach of those who meet standard underwriting guidelines.

Many of today’s fist-time homebuyers are qualified to take on a mortgage and have the financial means to repay their obligations. They have sufficient income to take on additional debt and maintain strong credit histories. The biggest challenge first-time homebuyers face is the ability to accumulate the additional funds needed to close, based on the traditional 20% down financing.

Saving for a down payment

While conventional wisdom says you should have a 20% down payment, this old way of thinking doesn’t take the unique financial needs of today’s homebuyers into consideration.

Saving money for a down payment takes time. According to research, it would take the average American more than a decade to save up for a 20% down payment on a median-priced home. For those looking to buy a home within the near future, that’s simply not feasible.

The good news, however, is that a 3% down payment is well within reach for many homebuyers. In fact, many homebuyers may be surprised to learn they already have the funds available to buy a house. Read this post to discover 15 places your down payment might be hiding 

If you’re looking to buy a home in 2015 and are interested in learning more about about this exciting new program, send us a message! As your trusted mortgage provider, we’d be happy to help you discuss your options and look forward to working closely with you for all of your home financing needs.

tross

Tim Ross is CEO of Ross Mortgage Corporation and a lifelong mortgage lender. He has served as president of the Mortgage Bankers Association of Michigan and two terms as a governor on the Residential Board of Governors with the Mortgage Bankers Association of America. Today, Tim is an active participant, charter member and past director of America's Mortgage Cooperative and recently served as the Chairman of the Mortgage Industry Advisory Board for the State of Michigan. Outside of work, Tim enjoys running, golfing and participating in triathlons.

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