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It’s a Great Time to Buy
By: Barton Skurbe, Senior Vice President, Mortgage Banking, Univest Bank and Trust Co.
As we head into the spring housing market, there is good news for homebuyers. Fannie Mae has recently announced two new loan products that can help homebuyers that have limited funds for a down payment.
The first is Fannie Mae's MyCommunityMortgage®.This product allows first time homebuyers to provide a down payment of only 3%. This product will expand access to credit for qualified first-time homebuyers that may not have the resources for a larger down payment. In addition, it allows for reduced private mortgage insurance (PMI) coverage. The reduced PMI coverage equates to a lower PMI payment which lowers the overall monthly mortgage payment. The MyCommunityMortgage® increases homeownership opportunity for those who would not have qualified previously. However, there is one caveat, the MyCommunityMortgage® has restrictions on the borrower’s income level as it is a product aimed to assist low- to moderate-income buyers.
However, those that do not meet those requirements are not out of luck. Fannie Mae also added a more basic 3% down product that does not have the income restrictions as the MyCommunityMortgage®. The one difference is that this product does not allow for reduced PMI coverage which will result in a slightly higher monthly mortgage payment versus the MyCommunityMortgage®.
The Department of Housing and Urban Development also announced a change to their FHA program which will have an immediate positive impact on home affordability: lower monthly mortgage insurance premiums (MIP). With lower MIP, the overall monthly mortgage payment will be reduced and, in turn, can make qualifying easier.
Thinking of buying a home? With these changes, it is a great time. Get started by finding a trusted mortgage professional to guide you through the process.
Equal Housing Lender
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