Lack of a big downpayment keeping you from buying a home? There are programs out there to help with this exact situation.
Freddie Mac, a provider of mortgage funding for the nation’s housing market, has a loan program for first time home buyers and low-income home buyers enabling them to receive mortgage loans with downpayments as low as 3%. This could be a great opportunity for those who have good credit and decent income, but with little in the savings account, such as millennials. It is interesting to note that the average down payment among first–time homebuyers is 6% and it’s 13–14% for repeat buyers, according to the National Association of Realtors®
Here is some information from Freddie Mac on Home Possible Advantage
Some key points:
- The property must be your primary residence
- You need to have the funds to pay closing costs and make the downpayment
- First time home buyers need to complete a home buyer education program
- Flexible credit terms
This 3% down program could be wonderful to help people get into homeownership by removing the daunting 20% down that many people make to avoid Private Mortgage Insurance (PMI). Borrowers of varying loan types can put down less than 20% but are typically then required to have PMI until they reach 20% equity in the home. PMI payments vary but an estimate would be $40-$80 per month 100,000 borrowed. Once 20% or more equity is gained, the PMI insurance can be cancelled and you continue on with your normal mortgage payments.
For detailed information talked to a mortgage lender in your area of Wisconsin. You can start searching for homes for sale in Wisconsin at firstweber.com. Remember it is very smart to get preapproved for a mortgage so you are ready to move fast when you “meet” the right house.
Other articles you might find useful:
Tips for buying in a tight market
What will you need to bring for a mortgage application
Additional 3% down information from Freddie Mac
Would a low downpayment program help someone you know? Please share.
First Weber sells real estate throughout Wisconsin: Metro Milwaukee and Southeastern WI, South Central Wisconsin, Southwest Wisconsin, Central Wisconsin, Northeast Wisconsin, Western Wisconsin and Wisconsin’s great Northwoods. You can start searching for Wisconsin real estate and Wisconsin real estate agents at firstweber.com
Thanks for reading the First Weber Wisconsin real estate & Wisconsin living blog.