If you’re like most people, you know how difficult it can be to save up 20 percent of a home’s purchase price to make a down payment.
If you chose to continue renting because you couldn’t afford a down payment, you wouldn’t be alone. In fact, the prospect of saving up a down payment keeps potential buyers locked into leases for years longer than they should be.
Fortunately, though, the Freddie Mac Home Possible Advantage Mortgage program may make it easier for you to buy a home.
What is Home Possible?
The Home Possible Advantage Mortgage program is designed for low- to moderate-income home buyers, and many homes for sale in Lake City and the surrounding communities may be a perfect match for your needs if you fall into that category.
What makes the Home Possible Advantage Mortgage different from others is that it requires only a 3 percent down payment if your credit score qualifies. Some people need to come up with a higher down payment, such as those with credit scores on the lower end of the spectrum.
Qualifying for a Home Possible Advantage Mortgage
If you want to qualify for a Home Possible Advantage Mortgage, you must:
- Meet the minimum credit score requirement, which is currently 660
- Earn no more than 100 percent of the median income in your area (you can check your area’s median income here)
- Take part in a borrower education program if this is your first home purchse
Do You Need Private Mortgage Insurance?
As with all other Freddie Mac-backed loans that don’t require a 20 percent down payment, private mortgage insurance is required.
What is PMI?
Private mortgage insurance protects the lender if you don’t make your mortgage payments. Typically, you pay PMI in “points,” and you’ll pay them with your mortgage payments for a set period of time—usually until you’ve paid off 20 percent of your home’s value.
The amount of money you have to pay for private mortgage insurance (which again, is translated into “points”) will depend on how much you owe versus the amount of your home’s value.
Are You Buying a Home in Lake City?
If you’re buying a home in Lake City or any of the surrounding communities, we’d love to help you find one that meets your needs.
Call us at 386-243-0124 or contact us online. Let us know what you want from your next home, and we’ll help you find it.