PMI is required and the lower the down payment on Fannie/Freddie loans, the higher PMI rate. With 5% down all of the government-backed loan programs are still available (assuming a primary residence purchase). With less than 10% down the maximum seller concession amount for Fannie/Freddie loans is 3%. The other advantage of 10% down is buyers are allowed to get up to 6% seller concessions with Fannie Mae and Freddie Mac conventional loans. The rates tend to be pretty similar or even sometimes slightly better than the 20% down option because the PMI reduces the risk to the loan investors. With 10% down borrowers normally are required to include PMI in the monthly payment (except with VA loans). The benefits of 20% down mostly match the 25% down but rates tend to be a little higher with the 20% down option – At 25%+ down the interest rates tend to be the lower than with smaller down payments
– Putting more than 20% down means no private mortgage insurance (PMI) required – Lower loan amount means a lower monthly payment There are several advantages to having a larger down payment like this: In some cases, such as when a borrower is selling a current home and buying a new home, borrowers will have more than 25% down. On occasion consumers will ask us “what is the optimal down payment amount for a home purchase?” The answer to that question depends on the circumstances of the borrower, but the following are some rules of thumb to follow: There is no telling how long these record low rates will be available so it would be prudent to take advantage of these rates before they bounce higher again. Contact us in the sidebar to learn more about refinance options or if you are considering buying a home, contact us at our home purchase page. And if you’ve been considering buying a home, these historically low rates are allowing borrowers to qualify for more than ever before. If you have considered refinancing to a lower rate and payment or perhaps to get cash out, there may never be a better time than now to look into a refinance. These factors drove mortgage interest rates to drop to unprecedented lows in 2020, and the good new is rates are still hovering near all time lows. One of the side effects of widespread fear in the markets has been an uptick in intervention by the US federal reserve, in addition to a flight to safety by many investors. The global pandemic that has gripped the world for the last year has not only been a health emergency, but has also massively impacted financial markets. Just fill in the form in the sidebar to be pointed in the right direction on these refinance options. Contact us to learn more about reverse mortgages. Reverse mortgages allow homeowners to utilize the equity in their homes to reduce or eliminate mortgage payments. For homeowners who are at least 62 years old and who have a lot of equity in their homes, a government-backed reverse mortgage can sometimes be beneficial.
Monthly payments on 15 year mortgages are generally higher than payments on 30 year loans, but for borrowers who can handle somewhat higher payments, refinancing to a 15 year mortgage can mean paying the mortgage off much sooner and saving massive amounts of money in interest paid over the the life of the loan. Interest rates on 15 year fixed mortgages tend to be significantly lower than rates on 30 year fixed loans. If you have at least 5-10% equity, contact us to look at refinancing to remove monthly PMI payments. Some popular reasons to get a cash out refinance include paying off credit cards and other expensive debts and doing home improvements. Home values are increasing across the country which allows for cash out refinances in many cases. The good news is rates recently have dropped to lows not seen in years. Refinancing to a better interest rate can help families save a lot of money. – Lower interest rates and monthly payments. There are several superb government-backed refinance programs for borrowers who have even a little equity in their homes. Fill in the contact form on our home purchase programs page to learn more about the available government-backed purchase programs and perhaps to get pre-qualified for a home purchase loan. With mortgage interest rates quite low and housing prices increasing across the country again, now is a terrific time to look into buying a home. The goal of these programs is to allow for low down payments and to make it easier for people with less than perfect credit to qualify for a mortgage. There are several government-backed home purchase programs designed to make it easier for Americans to buy a home, including programs from Fannie Mae, Freddie Mac, FHA, USDA, and the VA. New Government Refinance and Home Purchase Programs Now Available
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