Stop paying rent: Mortgages with Low Down Payment Options

Recently I wrote about neighbors in West Seattle who were looking for a new place to rent because they have two cats and a dog, limiting their options.  I’ve pets my entire life, this is my cat Rocko at his typical hang-out where he can view everything on our stairs.

In my last post, I shared Fannie Mae’s Home Ready mortgage program which offers a low down payment with improved pricing on rates and mortgage insurance.

In this post, we’ll take a look at FHA mortgages as a possible option. FHA is another low down payment option that can offer more flexible underwriting than some conventional programs. The minimum down payment allowed for an FHA mortgage is 3.5%. FHA has both upfront and monthly mortgage insurance that does not “cancel out” when your loan to value or home equity reaches 80%.

With the goal of keeping our payment close to $2200 and using the least amount of funds for down payment as well as pricing our rate as close to “par” as possible (little to no discount points), we are at the same sales price with FHA as we were with the Home Ready scenario.

Sales price: $320,000

Loan Amount: $314,204 (includes upfront mortgage insurance premium)

FHA 30 year fixed interest rate (as of 1:45 pm April 24, 2018): 4.625% priced with -0.025 points (very small rebate credit of $78.55) with an APR of 5.680%.

3.5% down payment: $11,200.  Total estimated funds due for closing, including the down payment, closing cost and reserves (taxes/insurance): $17,522.09. NOTE: The funds can be a gift from family members, IRS refund or even borrowed against your 401k.

Monthly mortgage payment: $2,215.95 includes principal and interest of $1,615.45; estimated home owners insurance of $50.00; estimated property taxes of $333.33; mortgage insurance $217.17.

The Home Ready program from my earlier post has a slightly lower payment as well as less funds due for closing. In my opinion, the most likely reasons why someone would opt for FHA over the Home Ready would be because their income exceeds the limitations for a property with Home Ready, their debt-to-income ratios are higher or perhaps the home buyer had a bankruptcy, foreclosure or other past credit issues.  Another reason why someone might opt for an FHA mortgage over conventional is because they pay alimony and FHA treats alimony differently than conventional mortgages.

If you’re tired of paying rent and are considering buying a home, I’m happy to help you…even if you still have a year left on your lease, it’s never too early to get prequalified and to start working on your preapproval by improving credit or focusing on savings. Often times, doing things that are “common sense” like paying off credit cards may actually not be the right steps for buying a home and getting preapproved for a mortgage.

Rates quoted are subject to change and loan terms are subject to credit approval. This is just a small sample of the mortgage rates and programs that I have available. If you would like me to provide you with a mortgage rate quote for your home purchase or refinance on your home located anywhere in Washington state, please click here.

PS: Stay tuned… I will be providing another scenario in an upcoming post featuring down payment assistance.

Reason to stop paying rent #7: You have a pet

I love my pets, Rocko and Hitch. We have had pets before we had (our now adult) children. I totally understand someone’s anguish when they are trying to deal with where they are going to live when they have pets.
This morning, I was catching up on Facebook and in our local neighborhood group for West Seattle, a neighbor is worried about if their landlord is getting ready to sell the home they are currently renting. [Read more…]

NEWS FLASH: Mortgage Master now offers Bridge Loans

I’m pleased to announce that Mortgage Master Service Corporation is once again, offering bridge loans to our clients. A bridge loan allows a home owner to tap equity from their current home for down payment on their next home before their current home has sold.  With a bridge loan, there are no monthly mortgage payments and the interest that accrues is paid off at the closing of the buyer’s listed home. [Read more…]

Gorgeous homes around $500k? Get OUT of Seattle!

This week, a real estate agent asked me to prepare some financial flyers for listings in Pierce County. The homes are stunning – I live in Seattle and cannot imagine having a large garage for our cars…although before living in Seattle, I had a sweet 2 3/4 garage. [Read more…]

Financing a “multi-generational” home

It’s becoming more common for families to have multiple generations living under the same roof. Some families opt to commit to buying a “multi-generational” home together designed to accommodate their lifestyle, whether it’s a home with an attached or detached dwelling unit (aka mother-in-law apartment) or even a home built specifically for generations to live together, there are options available for living with your parents and/or grown children. [Read more…]

Avoid Delays with your Home Purchase

mortgage-porter-sold-homeHere are a few suggestions for when you are preparing a purchase and sales agreement to help avoid delays. NOTE: I’m NOT an attorney and this is NOT legal advice. I’m simply a Licensed Loan Officer offering suggestions based on my observations.  🙂 [Read more…]

How to Buy a Home with your Roommate

Fannie Mae’s HomeReady mortgage allows a home buyer to qualify using “boarder income”.  What does this mean? Remember our favorite roommates Laverne and Shirley?

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EveryHome: A match maker for home buyers and sellers [Video]

On our last episode of Seattle RE Chat featured Bryan Copley, CEO of EveryHome.

Everyhome’s concept is based on the idea that every home is for sale for the right price. Bryan thinks of as a “match maker” between home buyers and home owners – even homes that are not yet listed (off market).

Check out our interview with Bryan and learn more about EveryHome.