Fannie Mae HomePath now offering Financial Flexibilities

financial_flexibilityEarlier this month, Fannie Mae retired the Fannie Mae HomePath Mortgage program which was available exclusively to homes owned by Fannie Mae as a result of foreclosure. This popular program offered mortgages with no private mortgage insurance and no appraisal was required. Investors were able to buy HomePath properties with reduced down payments.

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Fannie Mae HomePath offering 3.5% towards closing costs!

mortgageporterraiseFannie Mae HomePath has announced they will offer up to 3.5% towards the buyers closing cost through March 31, 2014. Fannie Mae HomePath properties are homes that Fannie Mae owns through foreclosure. Fannie Mae offers special financing on these homes with reduced down payment, no mortgage insurance and no appraisal required. You can learn more about the Fannie Mae HomePath Mortgage by clicking here.

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Fannie Mae HomePath Minimum Down increased to 5%

This weekend, Fannie Mae will be updating DU (Desktop Underwriter) to reflect the new higher minimum down payment requirements. I’ve written about that here.

This new underwriting guideline will also impact Fannie Mae HomePath mortgages, bringing the minimum down payment from 3% for owner occupied purchases to 5% down.

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Three different 3 Percent Down Conventional Loan Programs

EDITORS NOTE: Fannie Mae is no longer offering the FannieMae HomePath mortgage program. If you are considering buying a Fannie Mae HomePath property (foreclosure that is owned by Fannie Mae) in Washington state, I’m happy to help you.

UPDATE February 21, 2014: Conventional financing currently has increased the minimum down payment to 5% from 3% unless you are considering the Home Advantage Mortgage Program. Mortgage programs and guidelines change constantly so please check with your local mortgage professional regarding what is currently available for you. 

I’m pricing out a scenario for a first time home buyer who’s looking at buying a home priced at $250,000 and they have roughly 3% set aside for down payment plus closing cost. Since they have excellent credit, they are leaning towards conventional financing instead of FHA, which has much more expensive mortgage insurance (upfront and monthly).

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What is the Difference Between Fannie Mae Homepath and Freddie Mac Homesteps? [UPDATED]

EDITORS NOTE: Fannie Mae is no longer offering the FannieMae HomePath mortgage program. If you are considering buying a Fannie Mae HomePath property (foreclosure that is owned by Fannie Mae) in Washington state, I’m happy to help you.

Fannie Mae and Freddie Mac both offer special incentives to entice buyers to properties they have foreclosed on. Fannie Mae’s program is called Homepath and Freddie Mac’s is Homesteps. Although the names some similar, their incentives are VERY different. What Fannie Mae Homepath and Freddie Mac Homesteps do have in common is that the properties are generally in better shape than other distressed homes.

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Qualifying to buy a $200,000 home in Seattle

I’m working with a first time home buyer who’s interested in buying a home priced around $200,000 in the greater Seattle area. I thought I’d share some of the programs we have available at Mortgage Master Service Corporation that may help her accomplish her home buying goals.

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Search for foreclosed homes on Zillow

Zillow has added a “foreclosure center” where you can search for foreclosed homes in your neighborhood. The search includes bank owned homes (REO) and pre-foreclosures (a home that is getting to auction).

Here’s a snap shot of what Zillow is showing as current foreclosures in West Seattle. The red houses are foreclosures and the blue houses are pre-foreclosures.

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Comparing FHA and Conventional Financing for buying a $300,000 Seattle Home

I’m working with a homebuyer who is looking to buy a home in Seattle priced around $300,000 with minimum down payment. Rates are based as of October 15, 2012 5:00 pm with excellent credit (scores of 740 or higher) using a 30 year fixed rate. For your personal rate quote based on current pricing for a home located in Washington, click here.

We’re also using rebate pricing to pay for closing cost to keep the amount of funds needed for closing at a minimum. Quotes below are for a single family detached (non-condo) dwelling. Rates based on closing just in time for Thanksgiving on 11/21/2012 (less than 40 days away – can you believe it).

Conventional 30 Year Fixed with 5% down payment:

3.500% (apr 3.967) provides a PIMI (principal, interest plus mortgage insurance) payment of $1,424.16. Net closing cost (not including prepaids and reserves) are $290. NOTE: for prepaids and reserves, factor having 14 months of home owners insurance and around six months taxes collected (depending on when your first month’s payment is due).

3.250% (apr 3.704) has a PIMI payment of $1,394.72 (taxes and home owners insurance are additional). Closing cost are estimated at $3140 (not including prepaids/reserves).

NOTE: with conventional financing at 5% down, the seller can contribute up to 3% of the bona fide closing costs, prepaids and reserves. Buyer must meet the down payment requirements of 5% ($15,000 for this scenario).

Fannie Mae Homepath with 5% down payment (you can put down as little as 3% with this program, which will impact the mortgage rate).  Fannie Mae Homepath is only for specific properties (Fannie Mae foreclosures) and does not require an appraisal nor mortgage insurance. Click here to learn more about Fannie Mae Homepath for homes located in Washington.

3.875% (apr 3.963) with PITI (no mortgage insurance!) of $1,340.18 with net closing cost of $3400, not including prepaids and reserves. Seller can pay all prepaids and reserves if negotiated into the contract.

FHA 30 Year Fixed with 5% down payment (NOTE: FHA has both upfront and monthly mortgage insurance).

3.00% (apr 3.831) with PIMI of $1504.89 and net closing cost of $2134 excluding prepaids and reserves. Minimum down payment of $15,000 required – the seller can pay the closing costs, prepaids and reserves up to 6% if negotiated in the purchase and sales agreement.

FHA 30 year Fixed with 3.5% down payment: the only difference in pricing is slight with the monthly mortgage insurance. 

3.00% (apr 3.890) with PIMI of $1538.59 and net closing cost of $2120 not including prepaids and reserves. Minimum borrower investment is 3.5% down of $10,500. The seller can pay prepaids and reserves if negotiated in the purchase and sales agreement up to 6% of the sales price.

If the borrower served the military, they might qualify for a VA loan which would allow for zero down in this scenario. And a home not in Seattle, in a  rural location with borrowers who meet the income limitations, may qualify for a zero down USDA loan.

If you have questions or are interested in getting preapproved for a mortgage for a home located anywhere in Washington, please contact me.