Purchase a New Home with Only 3% Down in Greater Chicago
Posted by: Mike Dulla, President, United Home Loans
Are you looking to purchase your first home in Chicago or the surrounding suburbs? If you are like most first time buyers, the toughest part of becoming a new homeowner in this area is saving sufficient funds for a down payment. Many prospective buyers have been given bad information about buying that first home – “you need 20% down, you have to have perfect credit, it is impossible to get approved for a mortgage”. All of these statements are false.
Recently, Fannie Mae has rolled out the HomeReady program. This program is designed to help people become homeowners by lowering the down payment requirement to 3%. Below is a brief summary of the program and how it can benefit potential home buyers.
- 3% down requirement allows for flexible sources such as gifts and grants
- Competitive interest rates that meet or beat standard conventional interest rates
- Rental and boarder income may be considered for loan approval
- Expanded underwriting ratios allowed when using non-borrower household income
- Reduced mortgage insurance (PMI) for loan to values over 90% and up to 97%
- Income limits apply – limit is equal to 100% of average median income or less
- No income limits for low-income census tracts
Homeownership education empowers borrowers to become successful homeowners. Purchasing a home is a major investment and should always be researched and evaluated thoroughly. A great first step is to talk to a lender about obtaining a mortgage pre-approval. During this process, a lender will review your credit, income, and assets to let you know an estimated loan amount and sales price for which you would be approved. By taking advantage of the 3% down HomeReady loan, you may be able to get pre-approved and purchase that first home sooner than you think. Please contact us at 708-531-8388 for information. We are local to the Chicago market and always willing to help.