Low down payment, no down payment loan options for 2017

Minneapolis, MN:  Just 10-years ago, 30-year fixed rates were 6.125%, and the real estate market was hot. With rising interest rates, 2017 may be a bit more challenging for home buyers. But the biggest challenge for most people who wish to buy a home is down payment.

You do not need 20% down payment to buy a home! I repeat, you do not need 20%. This large down payment myth has been around forever, but it simply isn’t true for the vast majority of people buying their first primary residence. There are many program that allow for no down payment, or low down payment. Some jumbo loans buyers (loans over $424,100 in most parts of the county), as will people buying investment properties will usually need a large down payment. But for the rest of us, there are many low down payment, no down payment loan options for 2017.

First Time home buyers, Down Payment Assistance

First Time Home Buyer programs:

The term first time home buyer program covers a wide net of potential programs and options. To be a first time home buyer, you simply must not have owned a home in the past three-years. If you owned a home in the past, but it has been longer than three-years, you are a first time home buyer again. Some options allow for lower rates, cheaper mortgage insurance, and even down payment assistance. Most come with additional strings attached, like household income requirements, lower debt to income requirements, and that you must take first time home buyer education classes.

FHA Loans:

FHA backed loans are very popular, and only require a small 3.50% down payment. The down payment can be your own money (checking/savings/retirement), a gift from a family member, or can come from a down payment assistance program. FHA loans are more forgiving than other loans, for example allowing just a two-year waiting period if you have a previous bankruptcy, and a three-year waiting period after a previous foreclosure. Maximum loan limits apply based on the medium income of the county the property will be located.  Check FHA Loan Limits

Conventional 97 Loans:

Both Fannie Mae and Freddie Mac offer a 3% down payment program.  The down payment can be your own money (checking/savings/retirement), or a gift from a family member. This is a great program, especially for those with higher credit scores, or homes that need a little TLC that might not pass FHA loan inspections.

Conventional HomeReady™ Loans:

Fannie Mae offers an additional 3% down loan called HomeReady for first time home buyers. You need to take a home buyer education class, but you’ll be rewarded with lower interest rates, and lower mortgage insurance than the standard 3% down conventional loan.

Conventional 95 Loans:

Both Fannie Mae and Freddie Mac offer a basic 5% down payment program.  This is your everyday, plain vanilla mortgage loan available to everyone.

VA Loans (100% financing):

Available for active or retired U.S. Military personal, the VA loan is truly one of the best benefits this country offers for your service. The VA loan is a no down payment program, and also has no mortgage insurance whatsoever. This is a huge savings per month over any other low or no down payment loan. Closing costs can be rolled into the loan, making for a home purchase, that for most people, is about as close to zero money out of pocket to buy a home as you’ll ever get.

USDA Rural Housing (100% financing):

Available to those wishing to buy in more rural areas of the country, the USDA Rural Development loan does not require a down payment. While the loan does have mortgage insurance, the cost is very low compared to other loans.  You need to meet household income, and property location requirements.

Down Payment Assistance:

Down payment assistance comes in many different flavors from neighbors, city, county, and even state programs. Welcome first time home buyers. Apply onlineGenerally these are in the form of a loan that needs to eventually be paid back, but there are a very small number that are actually forgiven if you live in the home a set period (like 9-years or longer). The assistance loan can be combined with a standard loan, like an FHA loan, to be used for down payment. Household income, and property location are common requirements.

The Bottom Line:

If want to own your own home, you have OK or better credit, a stable income, and at least a little money in the bank, by all means, you should apply for a home loan. Your Loan Officer will review your loan application, then go over the various program to see what programs you qualify for, how much house you can buy, what the payments might look like, and finally, how much cash you may, or may not need to put it all together.

Best case, you’ll be in your own home sooner than you thought.  Worse case, your Loan Officer will go over what you need to do to be in position to buy a home in the near future.  Either way, a win win for you.


No down payment VA home loans

Take Advantage of your VA Benefits! VA Home Loans for Minnesota and Wisconsin military veterans

VA loans MNWhy get a VA Loan?    

It’s simple … Lower Rates. Lower Payments. $0 Down Payment.

Thousands of people are using their VA Loan benefit every single month. Let us help you purchase a MN or WI home with ZERO DOWN, or lower your existing VA home loan with a refinance to today’s low interest rates.

BUYING A HOME WITH A VA HOME LOANS

Purchase with Zero Down

A VA Loan s

till allows a Vet buy a home with Zero DOWN and finance 100% of the home’s purchase price. Now more than ever, banks are requiring larger down payments for conventional loans with more expensive mortgage insurance. In many cases they require 10-20% down, putting home ownership out of reach for many prospective buyers.

How much will $0 down save you? FHA loans require 3.5% down. Conventional loans will require a minimum of 5% down, and in many cases as much as 10% and 20%.

 VA Loans Minnesota

 

VA loans have NO PMI = Lower Monthly Payments

ZERO DOWN VA Home LoansA VA Loan offers a HUGE savings benefit. They do NOT require monthly PMI, or private mortgage insurance. PMI is an added monthly expense required for conventional loans and FHA loans where the borrower finances more than 80% of the home’s value.

Interest rates are also typically lower with a VA Loan, than a conventional loan. A lower rate combined with monthly PMI savings can substantially lower your monthly payment.

Getting Qualified is Easier

The qualification guidelines are less stringent for VA Loans. Because the loan is backed by the government, lenders don’t need to meet strict lending rules.

VA Purchase loans for Veterans – APPLY

VA Loans require no down payment, and have no mortgage insurance, plus you can roll all your closing costs into the loan. This makes for one heck of a great first-time home buyer deal for military veterans wanting to buy a home! The country appreciates your service. This is one way we pay you back. Today mortgage rates on VA loans are very low, making homes even more affordable.

VA Home Mortgage Loan Advantages vs Other Mortgage Loan Options

  • VA home loans do not require a down payment, unless the purchase price is more than the appraised value or in excess of current loan limits.

  • VA home loans have limitations on which closing costs may be assessed to the veteran.

  • VA home loans have no prepaid without penalty.

  •  Maximum (zero down) VA loan has increased to match conforming loans!

  • VA home loans may have forbearance extended to worthy VA homeowners experiencing temporary financial difficulty

  • VA performs personal loan servicing and offers financial counseling to help veterans avoid losing their homes during temporary financial difficulties

  • VA interest rates are competitive with conventional loan interest rates.

  • VA home loans do not require mortgage insurance – this is a HUGE savings.

  • Although there is no down payment required – There are still closing costs, but the seller usually pays ALL of the veteran’s closing costs (and with a $0 down payment, the veteran can literally purchase a home for nothing).


20% down NOT needed to buy a home in Minnesota

Minnesota Down Payment mortgage loansSt Paul, MN:   Question.  How much money do you think you need to put down to buy a home?

If you answered anything higher than ZERO, your answer is wrong!

Would it surprise you to learn that most people can get a mortgage with a great rate with just 3.5% down, and in some cases, zero down?  For most people, it is about the same amount of money you would spend on the first month, last month, and damage deposit on a rental property… but now, it is your home.

For some strange reason, the myth you need a huge down payment persists.  It simply isn’t true, yet I hear it all the time. I think it is because we hear it on TV.  I know I have. This is mostly from the talking heads on either coast. Many of those areas are what is known as “high cost” locations.  Anytime you go over $417,000 – you are now a jumbo loan, and jumbo loans are typically 20% down.  But for the rest of us…  Heck no, just 3.5% down!

  • FHA Loans are very popular, and only require 3.5% down
  • Good credit conventional loans only require 5% down
  • VA loans are zero down
  • USDA rural housing loans, for rural parts of the country, are zero down
  • Community programs can many times be used for your down payment to effectively get you zero down

Don’t let misinformation derail your dream of home ownership. Contact a local licensed mortgage professional to get pre-approved today.  Once approved, contact a great Real Estate Agent to find your dream home!

 


Getting a VA Home Loan in MN or WI

Minneapolis, MN: VA Home Loans In MN and WI are probably the coolest mortgage loan lenders offer. VA Home Loans in MN and WIIt is available both while serving our country and after they are discharged.

Upon a veterans return,  hey usually are looking to re-establish themselves the the communities that they will be returning to. This means that many of them will be looking to purchase a home that they can settle in and raise their families.  A VA Mortgage can assist our Veterans in making that transition.

VA Mortgages provide our Veterans with two major advantages that other Mortgage programs do not have.

VA Loans require no down payment, and have no mortgage insurance, plus you can roll all your closing costs into the loan. This makes for one heck of a great first-time home buyer deal for military veterans wanting to buy a home! The country appreciates your service. This is one way we pay you back. Today mortgage rates on VA loans are very low, making homes even more affordable.

VA Mortgage benefits for a Veteran:

A VA Streamline Refinance is similar to the FHA Streamline Refinance. It is officially known as a IRRRL loan (interest rate reduction refinance loan) because of the money you can save by lowering your monthly interest rates. It was created by the VA in an effort help our veterans secure the lowest interest rate possible. This VA loan process is done quickly, with minimal hassle so our veterans can save immediately.

Those who are eligible:

  • Honorably discharged
  • Widow/widower of eligible service member or spouse of an MIA or POW
  • Wartime service – a minimum of 90 days active duty
  • Peacetime periods – 181 days of continuous active duty
  • Actively in service or a valid VA Form DD214
  • Have certificate of eligibility (I can usually get this for you)


Mortgages rates hover near record lows for week ending Nov 2, 2012

Mortgage Rates Settle in Near Record Lows

Minneapolis, MN: Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates mixed following the monthly employment report but continuing to hover near their record lows over the past six weeks. Last year at this time, the 30-year fixed-rate mortgage averaged 3.99 percent, dropping below 4.00 percent for the first time since Freddie Mac started reporting its weekly mortgage rates survey in 1971.

News Facts

  • 30-year fixed-rate mortgages (FRM) averaged 3.40 percent with an average 0.7 point for the week ending November 8, 2012, up from last week when it averaged 3.39 percent. Last year at this time, the 30-year FRM averaged 3.99 percent.
  • 15-year fixed rate mortgages this week averaged 2.69 percent with an average 0.7 point, down from last week when it averaged 2.70 percent. A year ago at this time, the 15-year FRM averaged 3.30 percent.
  • 5-year adjustable mortgages (ARM) averaged 2.73 percent this week with an average 0.6 point, down from last week when it averaged 2.74 percent. A year ago, the 5-year ARM averaged 2.98 percent.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates remained near record lows following the employment report for October. The economy added 171,000 jobs, above the market consensus forecast, and the two prior months were revised up a combined 84,000. The Labor Department also reported that the unemployment rate ticked up to 7.9 percent and that average hourly wages were unchanged.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.

 


VA Mortgage Loan Changes

VA Mortgage Loan Program Changes

Since World War II, The VA home loan program has helped over 18 million veterans receive government-backed mortgages.  Recently the President signed into law some modifications to the VA home loan program.  This new bill will benefit disabled service members, single-parent soldiers and military widows. The new changes include:

Surviving  spouses of Veterans

Before the change, the only way military widows could participate in the VA no-down-payment program is if their spouse had a service-related disability or died in the line of duty.  As a result of the change, a widow may get a VA loans  if the veteran had a service-related disability for at least ten years before their death.

Single parents and military couples

When applying for a VA home loan, you have to sign a piece of paper saying that the property will be your primary residence and you will be the primary occupant.  Military spouses can take the place of military members serving abroad when signing this paper, but this doesn’t necessarily help single-parent soldiers and married military couples.  As a result of this bill, dependent children will be able to meet the occupancy requirement.  Active service members who don’t have children, unfortunately, will still be unable to meet the occupancy requirements.

Disabled veterans

Every VA loans has a funding fee. This fee is added to the loan amount, and the proceeds to go making sure the program will be self-sufficient and not cost tax payers any money. The fee varies by service, first time or second time use of a VA loan, or a VA streamline refinance.

Borrowers with a VA service-related disabilities of at least 10% have always been exempt from this fee.

Many times, Veterans often have to wait months to get their official  VA disability rating.  Thus they potentially may have to pay the VA funding fee when they shouldn’t have to.  With this improvement to VA mortgage loan program, the VA will be required to waive the fee after the pre-disability exam indicates the individual is disabled, instead of waiting months for the official “disability rating.”

Adjustable Mortgages

While most VA loans are the standard 30-year fixed rate mortgage, adjustable mortagegs were an option. Those ARM loans were scheduled to be cut out of the VA loan program by the end of 2012, but adjustable VA mortgages  will now continue to be available.

Veterans living in high-cost area of the country

Veterans who live in the most expensive areas of the nation were hit hard last fall when loan limits for government-backed mortgages dropped to $625,000 from $729,000.  As a result of this bill, higher county loan limits will be reinstated sometime in 2014.

 

 


VA Streamline Refinance Loan

Mortgage Rates are at Historic Lows. Start saving money now on your VA Home Loan!

Minneapolis, MN: If you are a veteran, you are eligible for a great benefit, the VA Home Loan. If you currently have a VA Home Loan, you may qualify for another great benefit, the VA Streamline Refinance Loan.

Officially known as The Interest Rate Reduction Refinance Loan (IRRRL), it is one of the easiest refinance loans available today.  The VA Streamline Refinance is the second best programs offered to you through your housing benefits from the Veterans Affairs (the first was buying the home with a VA Home Loan!)

Potential NO Appraisal (upside down might be OK)
Lower Credit Scores
NO Qualifying Debt Ratios
NO Income Verification
NO Out of Pocket Expenses

A good local VA Mortgage Leader will show you how to utilize your Certificate of Eligibility and lower your rate and start saving money today.

VA guaranteed Loans are originated by private approved and authorized lenders. VA Mortgage Home Loans must be used for their own personal occupancy. The VA will guarantee a portion of the mortgage to the lender reducing their risk and allowing opportunity for lower interest rates. The VA Guaranty minimizes the risk to the lender which results in better financing terms.


Are mortgage rates going up?

ARE MORTGAGE RATES GOING UP?

Minneapolis, MN: Mortgage interest rates jumped up last week, putting a scare in those sitting on the fence, thinking about refinancing, yet waiting form rates to drop a bit lower. Lucky for them, Minnesota mortgage interest rates moved back down slowly to about where they have been holding for some time.

The big question is how long can mortgage rates remain this low? 

Mortgage rates have been stuck at these amazingly low levels for the past five months. According to Freddie Mac weekly survey of mortgage rates, last week was the first time that interest rates on a standard 30-year fixed-rate mortgage rose above 4 percent, only to slip back below this week.
It’s very clear that mortgage rates can’t stay this low forever. It was big news when 30-year rates fell below the 5 percent mark in March 2009 – a level unimaginable just a few years before. Now we’re a full percent lower than that. When you consider that rates rarely fell below 7 percent prior to 2001, and often ranged much higher, it’s clear that rates will eventually move back toward more historical norms. When I bought my first house in 1981 – I paid 16% for an FHA 30-year fixed mortgage.
The question is, when will that happen – and what will trigger it?  So, is it smart to keep holding out for lower refinance rates? Probably not…  Is it wise to not buy a house today?  Probably not, especially with these interest rates and zero down programs like the VA loan program, and the USDA Rural Development Program.