Down Payment Solutions For Illinois Home Buyers
United Home Loans
Posted April 20, 2011
Whether you are looking to purchase your first home or a larger home to accommodate your growing family, chances are you may have difficulty coming up with a 20% down payment. This is especially true if you purchased your current home any time in the last six or seven years, as home prices have fallen dramatically. Don’t fret! There is a new program that allows Illinois home buyers to reap the economic rewards of a 20% down payment without needing to come up with that much cash.
Typically, when your down payment is less than 20%, lenders are required to obtain mortgage insurance. Yes, those dreaded three letters that makes every buyer cringe – PMI (short for private mortgage insurance). That PMI provides some financial protection for banks against losses on loans. If a buyer defaults on a loan with only 5% down, the bank will lose a sizable amount of money in lost interest, attorney fees, repairs, maintenance and possible decreases in value. PMI reimburses the lender for some of those losses.
So why does this matter? The monthly PMI can be an extremely expensive component of your monthly payment. As an example, PMI for a $250,000 loan with 5% down can be $196 per month. This represents almost 15% in borrowing power. Meaning, if you eliminate that PMI, you could borrow almost $285,000 for the same monthly payment.
We have a program that does just that – we call it Buyer’s Edge. The Buyer’s Edge mortgage insurance program allows you or the seller to pay for that mortgage insurance up front. So with excellent credit scores but only 5% to put down, the seller could pay for that PMI for about 2%of the loan amount. And in this market, most sellers are willing to pay an additional 2% to sell their home.
So if you need an Illinois mortgage, a low Illinois mortgage rate and you have less than 20% down, contact our office for a free Rate and Payment Quote with our Buyer’s Edge PMI program. You will be happy you did.
United Home Loans provides mortgage loans in Illinois, focusing on Greater Chicago. While our office is located in Westchester, we provide mortgages in Naperville, LaGrange, Oak Park, Chicago, Elmhurst, Western Springs, Winnetka, Barrington, Lake Forest and everywhere in between.
Please give us a call at (708) 531-8388 with any questions or if you want to Purchase or Refinance! You can also visit our "Get A Quote" page to fill out our quick application.
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