Recently launched home advantage mortgage details

Recently launched a new affordable mortgage option that allows a down payment as low as 3 %. The Home Possible Advantage mortgage is perfect for low and moderate-income borrowers with limited savings, counting first-time homebuyers.

The loan can then be sold to the secondary market as a conforming loan, offering borrowers with good credit and the capacity to pay closing costs the ability to chase the American Dream without saving for years and years to pay 20 % down.

Closing costs vary broadly depending on where you live, but they average $2,539 for a $200,000 home. With the Home Possible Advantage, savings and other sources to provide the 3 % down payment.

Required credit scores depend on the type of loan creation you want and whether or not you are buying a single unit or up to 4 units in the same building, but you can count on at least a minimum of 660 to 680 for single tenancy.

You can also paying private mortgage insurance for any loan with less than 20 % down. PMI is a policy that protects the lender should you defaulting, and the cost is based on your loan-to-value ratio and credit scores. Expect to pay 40 to 80 dollar per month for every 100,000 dollar you borrow. Once you have build fairness of at least 20 % in your home, you can contact the lender to review your loan against how much you have paid down and get your PMI canceled.

Home Possible Advantage mortgages can be used for a refinance of an existing mortgage. That means you take no money for the proceeds for remodel or repairs. Available products are in 15-, 20-, and 30-year fixed-rate terms.

Some borrowers may be nervous about receiving into a low-down-payment loan, assures lenders and consumers that the product is intended with the suitable credit underwrite supplies for today's market.

The Home Possible Advantage has tougher credit values than low down payment mortgages of the past, including lower debt-to-income ratios, no variable rate terms and it require complete documentation of employment and rental history, plus it's only for owner-occupants who complete housing therapy online from approved vendors.