rural Archives - Page 27 of 93

Apache is functioning normally

November 15, 2023 by Brett Tams

Gone are the days of the zero-down mortgage. At least for the typical home buyer.

Instead, the 2023 Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) revealed that down payments haven’t been higher in decades.

This, despite the widespread availability of low-down and zero-down home loan options.

As for why, it could be because inventory remains low, which has kept competition lively in spite of much higher mortgage rates.

Another reason might be those high interest rates themselves, which make it less attractive to take out a large loan.

Median Down Payments Highest Since 1997 for First-Time Home Buyers

Per the NAR report, the typical down payment for a first-time home buyer was 8%, which might not sound like a lot.

But it is the highest figure since 1997, when it stood at 9%. If you look at the chart above, you’ll notice it dipped pretty close to zero in those bad years back in 2005-2006.

At that time, creative financing and lax underwriting (aka no underwriting at all) allowed home buyers to purchase a property with nothing down.

While that may have been risky on its own, they could also use stated income to qualify for the loan.

And they could choose a super toxic loan type, such as the now forgotten option ARM, or qualify via an interest-only payment.

That may explain why we experienced the worst mortgage crisis in recent history, followed by the nastiest housing market crash in generations.

So certainly some good news there, with down payments on the rise despite unaffordable conditions.

To that end, home buyers could be opting to put more down to get a more favorable mortgage rate, and/or to avoid mortgage insurance (PMI) and unnecessary pricing adjustments.

Back when mortgage rates were hovering around 3%, it made sense to put down as little as possible and enjoy the low fixed-rate financing for the next 30 years. Not so much today.

Another reason home buyers might be putting more money down is due to competition. While the housing market has certainly cooled this year, there is still a dearth of supply.

This means if and when something decent pops up on the market, there may still be multiple bids.

And those who are able to muster a larger down payment will generally be favored by the seller.

The one worrisome thing was how first-time buyers were securing their down payments recently.

They’ve had to increase “reliance on financial assets this year,” including the sale of stocks or bonds (11%), a 401k or pension (9%), an IRA (2%) or the sale of cryptocurrency (2%).

Always a bit questionable if selling retirement assets to purchase a home.

Typical Down Payment for Repeat Home Buyers Up to 19%

Meanwhile, the typical repeat buyer came in with a 19% down payment, which is the highest number since 2005 when it was 21%.

Down payments for repeat buyers also tanked prior to the early 2000s housing crisis because underwriting was so loose at the time.

There was really no reason to come in with a large down payment at the time given the wide availability of flexible loan products, and the notion that home prices would just keep on rising.

This explains why homeowners at the time also favored negative amortization and interest only home loans.

They all assumed (or were told) that the home would simply appreciate 10% in a year or two and they could refinance over and over again to better terms.

Today, it’s more in line with levels prior to that fast and loose era, and appears to be steadily climbing.

This could also have to do with a large number of all-cash home buyers, such as Boomers who are eschewing the 7% mortgage rates on offer.

But it is somewhat interesting that the median number was 19% and not higher.

After all, a 20% down payment on a home comes with the most perks, like lower mortgage rates and no private mortgage insurance requirement. But I digress.

Note that all the figures from the survey only apply to buyers of primary residences, and do not include investment properties or vacation homes.

How Much Do You Need to Put Down on a Home These Days?

As noted, low and no-down mortgages still exist, though they are typically reserved for select applicants, such as VA loans for veterans and USDA loans for rural home buyers.

However, you can still get a 3% down mortgage via Fannie Mae or Freddie Mac, which virtually every lender offers.

There are also FHA loans, which require a slightly higher 3.5% down payment, but lower credit score requirements.

On top of this, there are countless homebuyer assistance programs, including silent second mortgages that can cover the down payment and closing costs.

In other words, there is no shortage of affordable loan options today.

But there is an advantage to putting more down, such as eliminating the need for mortgage insurance and having a smaller outstanding loan balance.

With mortgage rates so high at the moment, the less you finance the better.

This could also make it easier to apply for a rate and term refinance if and when rates do fall, thanks to a lower LTV ratio.

Regardless, it’s good to see down payments rising as home prices become more expensive.

This contrasts the bubble years back in 2004-2006 when homeowners put less and less down as property values increased. It didn’t turn out well.

Source: thetruthaboutmortgage.com

Apache is functioning normally

November 12, 2023 by Brett Tams

Bad credit can feel like the end of your ability to borrow, especially if you are trying to secure a home loan. However, there are options available for borrowers with bad credit to fund the purchase of their dream home.

One of those options is the VA home loan. Luckily, securing a VA loan with bad credit is not impossible. Let’s dive into the details of securing your VA home loan with bad credit.

What is a VA loan?

First, let’s talk about the details of a VA home loan. These types of home loans are an offered benefit to both veterans and current service members.

Va loans make qualifying for financing easier for veterans. Additionally, the VA loan offers other benefits such as a no down payment option which can be beneficial. If you’ve had trouble saving up a hefty down payment, then that benefit will come as a relief.

Although the Department of Veterans Affairs makes VA loans possible, the agency itself does not issue the loan. Private lenders issue the loan to the borrower, but the loan is guaranteed by the Department of Veterans Affairs. Based on this guarantee, VA loans do not carry private mortgage insurance that is typically required without a down payment of 20%.

All of these benefits can add up to a great deal for veterans looking to purchase a home. Even if you have bad credit, it is possible to take advantage of the benefits that a VA loan has to offer.

Who is eligible for a VA loan?

Before you apply for a VA home loan, you’ll need to obtain a Certificate of Eligibility. With this, you’ll be able to prove to your lender that you are in fact able to obtain a VA home loan.

Luckily, the process is not very complicated and almost every member or veteran of the military is eligible. Additionally, members and veterans of the reserve and National Guard are usually eligible. Finally, spouses of military members that died on active duty or from a service-related injury may be eligible for the VA loan.

If you are an active-duty military member, then you will need to serve approximately 6 months before you are eligible.

Keep in mind, you will need to use this home as your primary residence and move into the new home within 60 days of purchase. Sometimes exceptions are made to this general rule, but it will require a case-by-case evaluation. If you do not intend to use this home as your primary residence, then the VA home loan is not a viable option.

What are the credit requirements for a VA loan?

The Department of Veterans Affairs does not require a minimum credit score for VA loan borrowers. As far as the VA is concerned, the most important requirement is the certificate of eligibility. Other than that, the VA requires that borrowers have made on-time payments for the past 12 months. The VA also prefers that borrowers have not declared bankruptcy in at least two years.

However, private lenders are the entity underwriting the loan, not the VA. VA home loan lenders are usually willing to work with credit scores much lower than the mid-700s that conventional loans require.

Still, most lenders prefer applicants with a credit score of at least 620 for VA home loans. A 620 credit score is much lower than most lenders will accept without the VA guarantee to back the loan.

Don’t be discouraged if you have a lower credit score. Applications are evaluated on a case-by-case basis and there are other compensating factors considered. In some cases, a lender may be willing to work with you even if your credit score is below 620. Here are the other factors that VA lenders look at:

Debt to income ratio. If you have a high debt burden, then lenders are less willing to work with you. Generally, VA borrowers should have a debt to income ratio of less than 41%. If you have a low debt burden then your application will be stronger.
Free cash flow. The VA suggests to lenders that the monthly free cash flow of applicants is evaluated. Your free cash flow is based on your income minus all monthly obligations which might include childcare, taxes, insurance, and more.
Job history. The stability of your current job may come into play. If you’ve had a stable high paying job for over 2 years, that can help to strengthen your application.
Evidence of credit improvement. Even if you have poor credit, the lender may consider you an acceptable credit risk if you have been making payments on time for the past 12 months. Plus, if you are working on a Consumer Credit Counseling plan that can improve your application.
Past bankruptcies. If you have declared bankruptcy recently, that will negatively affect your application. Generally, the bankruptcy will prevent you from obtaining a VA loan for at least 1 to 2 years.

Most VA home loans carry a funding fee between 2 and 3.5% of the total loan. Typically, this fee is bundled into the loan, but some lenders may require it upfront. It can be an added expense on an already expensive home purchase process. Make sure to factor this in before you accept the terms of your loan.

VA Loan Choices

If you already have a home loan but are intrigued by the benefits of the VA home loan, don’t worry! You may have the opportunity to refinance an existing home loan into a new VA home loan.

If you are seeking a lower interest rate, then the Interest Rate Reduction Loan (IRRRL) might be a suitable option. Sometimes lenders refer to this loan option as a VA Streamline Refinance loan. The refinancing process through the VA is extremely straightforward. Plus, it is possible to complete the entire process without any out-of-pocket fees.

If you are seeking to take cash out of your home’s equity, then a cash-out refinance loan through the VA may be a practical option. You can use the cash to pay for home improvements and other obligations.

Both types of VA refinance options could help you reach your financial goals. Like the standard VA home loan, lenders may be willing to work with you even if you have less-than-perfect credit.

Other Options for Home Loans with Bad Credit

The VA home loan is not your only option if you have bad credit. Luckily, there are other programs on the market that you may be able to work with if you have bad credit. It is a good idea to check out all of your options. As you are looking, keep interest rates and down payment requirements in mind. You never know which will be the best option until you take a closer look.

FHA

With a minimum credit score requirement of 500, FHA loans are a suitable option for those with bad credit. If you have a credit score above 580, then you may even be able to qualify for a reduced down payment.

FHA loans are backed by the Federal Housing Administration. First-time homebuyers with bad credit are encouraged to use this program to secure their first home purchase. VA loans have more benefits associated with them, but FHA loans are still worthwhile.

USDA

USDA loans can also be a viable option if you have bad credit. The catch is that you must be willing to live in a rural area.

Typically, you’ll need to have a 640 credit score to have your application approved. However, it is not a hard cut-off. If you are planning to live in a rural area, then you might qualify for these U.S. Department of Agriculture-backed home loans.

Start Your Search

When you are ready to start looking through your mortgage options, it is important to get quotes from multiple lenders. Remember, even the smallest reduction in your interest rate can save you thousands of dollars over the course of your loan.

Here are a few places to get started:

LendingTree

LendingTree is not a lender, but the company can connect you to countless mortgage lenders across the country. They’ll match you to your options based on your credit score, debt-to-income ratio, and more.

It is a great resource to find several lender options within just a few minutes. If you want to compare many of your options easily, then LendingTree is a great place to start.

Find out more in our full review of LendingTree.

New American Funding

New American Funding may be the best option for veterans with poor credit. The company works with customers to individually review each loan application and the entire underwriting process.

It may take longer to close if you are working with a human underwriter. However, if you have a poor credit history, the reviewer may be able to stay flexible and push for an approved application.

Find out more about New American Funding in our full review.

Can’t find a lender?

If you cannot find a lender that is willing to work with you, then you may have to accept that your credit scores need improvement. Luckily, there are many ways that you can work to improve your credit score.

Start by checking over your credit report for mistakes. If you find an error, then make sure to have it removed from your credit report by disputing it with the credit bureaus. Next, make an effort to pay all of your bills on time. Timely payments can significantly boost your credit score.

Finally, start paying down your debts. Not only will this help improve your credit history, but also can bring some relief to your heavy load.

As your credit score starts to improve, your approval odds will continue to increase. When the time is right, apply again!

Bottom Line

Owning your home can be a milestone of American success. When you have a place to put down roots and grow into your community, it can be a wonderful feeling.

It is especially important for veterans to achieve this milestone. After their sacrifices made in service to our country, it’s remarkable to see them come home and build their lives. Take action today and start looking for a lender to fund your VA home loan.

Source: crediful.com

Apache is functioning normally

November 12, 2023 by Brett Tams

Real estate across the country has certainly been crazy over the past three years, but the housing market in Ohio still looks pretty sane. This isn’t California or Massachusetts, and that’s a good thing for house-hunters: Homes in the Buckeye State are significantly more affordable than in many other states around the country, and prices here tend to be far below national levels. Read on for everything you need to know about the cost to buy a house in Ohio.

How much does it cost to buy a house in Ohio?

The average price of a home in Ohio was $275,461 as of September 2023, according to statistics from Ohio Realtors. That’s quite a bit lower than the nationwide median price for the same month, which was $394,300.

Depending on where you’re hoping to call home in the state, though, your budget may look a bit different. Consider the average sale prices in some of the most popular cities: In Cincinnati, the average was $319,310; in Columbus, $348,569; and in Dayton, $261,583.

Outside the bigger cities, you’ll find a smaller price point. For example, the average sale price was around $203,000 in Ashland and Athens, and less than $200,000 in both Mansfield and Lancaster.

It’s helpful to focus on how a home’s price tag will translate into your monthly payments as its owner, especially with today’s high mortgage rates. Consider the monthly obligation on a $275,000 home, assuming a 20 percent down payment on a 30-year mortgage with a 7.5 percent interest rate: According to Bankrate’s mortgage calculator, that scenario would result in principal and interest payments of $1,538 a month (not including the additional costs of property taxes and homeowners insurance).

Down payment

How much money have you saved for a down payment? This upfront cost is crucial, because the more you are able to pay upfront, the less you have to borrow.

You don’t have to put down 20 percent, necessarily, although that is the magic number to avoid paying an extra monthly premium for private mortgage insurance. Here are the minimum down payment requirements for some of the most popular types of home financing (if you qualify):

Conventional loans: 3 percent
FHA loans:5 percent with a credit score of at least 580, or 10 percent with a credit score between 500 and 579
VA loans: No down payment required for qualifying military service members or veterans
USDA loans: No down payment required if you buy a rural property that meets specific criteria

One piece of good news for first-time buyers: Ohio has some generous first-time homebuyer programs that can help you cover your down payment and closing costs. You’ll need to meet certain qualifications for credit score, income and purchase price to be eligible.

Closing costs

According to data from Core Logic’s ClosingCorp, closing costs in Ohio add on another 2 percent of the purchase price — approximately $5,500 on an average-priced $275,461 Ohio home. That amount isn’t all coming out of your pocket, though. Closing costs are split between buyers and sellers.

Costs that are the buyer’s responsibility will include a variety of fees charged by your lender for things like a credit check and loan origination, as well as a required appraisal of the home’s value. You’ll also want to get a home inspection to verify the home’s condition. Lenders typically like to see a cushion that will keep you protected in the event of an emergency, too, so make sure you set aside some extra cash in reserve.

Cost to move

Don’t forget about the additional expense of moving all your stuff to your new Ohio home. According to HomeAdvisor, the average cost of a local move is just over $1,700. If you’re moving long-distance to get to Ohio, though, you’ll need to set aside a lot more money. A cross-country move has an average price tag of $4,617.

Homeownership costs

Once you buy a house in Ohio, you’ll need to be prepared to pay for its upkeep. While there’s no crystal ball for home maintenance costs, State Farm advises homeowners to budget between 1 and 4 percent of their home’s value for annual upkeep. On an average-priced Ohio home, that means you should plan to set aside up to $11,018 each year for upkeep.

You’ll also need to plan for property tax costs. In Ohio, the typical homeowner paid $3,235 to the government in property taxes in 2022. And don’t forget to budget for your homeowners insurance coverage, too, as well as HOA fees if your new home is part of a homeowners association.

Reducing the costs to buy a house in Ohio

Buying a house can seem overwhelmingly challenging, especially with today’s high mortgage rates. Consider these options to reduce your costs:

Ask for seller concessions: Across the country, more sellers are agreeing to cover a portion of the buyer’s closing costs, according to a report by Redfin. Don’t hesitate to ask a seller if they’re willing to help out with some of your costs. They don’t have to say yes, but they also don’t want to see you walk away from the deal.
Cast a wide net: If you have a flexible work arrangement that doesn’t require you to be in one specific location, look at cheaper locations beyond where your job is based. And if you don’t need a huge amount of space, a condo or townhouse is a great way to achieve homeownership for a lower price than a single-family home.
Hold out for longer: It’s OK to press pause if you think now just isn’t the right time. Mortgage rates are the highest they have been in more than two decades. There’s no guarantee they’ll come down, but taking some time to build your savings and your credit score while you wait might not be a bad idea.

Next steps

While Ohio’s home prices are certainly more appealing than many other parts of the country, buying a house here is not necessarily easy. For example, Redfin data shows that the typical home in Columbus gets four offers, which shows that the Buckeye housing market can feel just as competitive as Big Ten football. With that in mind, make sure you have an experienced local real estate agent on your team.

FAQs

As of September 2023, the average sale price for a home in Ohio was $275,461, according to data from Ohio Realtors.
No, they are increasing. Between September 2022 and September 2023, the average sales price in the Buckeye State rose 5.9 percent, according to Ohio Realtors data.
Yes — buyers pay some portion of closing costs in every state, including Ohio. These typically include an array of fees charged by the mortgage lender, among others.

Source: bankrate.com

Apache is functioning normally

November 11, 2023 by Brett Tams

Senator honored Arizona veterans, toured Phoenix VA improvements, and thanked veteran supportive organizations for their contributions to Arizona’s veteran community

PHOENIX – Arizona senior Senator Kyrsten Sinema visited the Phoenix Veterans Affairs (VA) Health Center with Director Bryan Matthews and Deputy Director Michael Welsh ahead of Veterans Day to honor and thank Arizona veterans and veteran supportive organizations. During her visit, Sinema also toured Phoenix VA’s construction projects that will improve Arizona veterans’ access to care, and reaffirm her commitment to veterans, servicemembers, and their families.

“Coming from a military family, I’ve seen firsthand the sacrifices servicemembers and their families make to keep our nation safe and secure – and I am forever grateful for their service. I’ve also seen how difficult it can be for veterans to access the benefits they’ve earned – which is why my team and I work day in and day out to solve problems, ensure support, and deliver real results for our veteran community,” said Sinema, a member of the Senate Veterans’ Affairs Committee.

Sinema visited the Phoenix VA with members of her Veterans Advisory Council and multiple veterans supportive organizations. The Senator honored the veteran supportive organizations in attendance – including Veterans First, Soldier’s Best Friend, Smiles for Veterans, and others – for going above and beyond to provide critical care and support for Arizona’s veteran community.

The Phoenix VA is currently undergoing several construction projects to better meet the medical needs of the veteran community. During her visit, Sinema toured the Sapphire Clinic, Emergency Department, and Radiology Department to see the construction improvements firsthand and learn how the VA’s expansion will result in better, more timely care for veterans.

Building on her successful work delivering lasting solutions for Arizona’s veteran community, Sinema recently introduced two bipartisan bills that would provide commonsense, long-overdue solutions to challenges veterans face. Sinema’s bipartisan VA Home Loan Awareness Act makes it easier and more affordable for veterans to access home loans, and Sinema’s VA Emergency Transportation Access Act protects access to emergency medical transportation for Arizona veterans in rural areas.

Sinema’s Veterans Advisory Council was formed to seek feedback from Arizona veterans and strengthen relationships between servicemembers, veterans, their families, and the communities that support them. The Senator’s advisory council includes members with backgrounds in the U.S. Army, Navy, Air Force, and Marines.

Source: sinema.senate.gov

Apache is functioning normally

November 10, 2023 by Brett Tams

It’s time to check out “Inspire Home Loans,” which is the lending partner of home builder Century Communities.

They pride themselves on knowing how their parent company’s construction timelines work so your home (and) loan remain on schedule.

In addition, they offer special financing deals that are reserved only for the buyers of properties in their communities.

This means you might be able to get your hands on a low mortgage rate that outside lenders just can’t beat.

Read on to learn more about them to determine if they could be a good fit for your mortgage needs.

Inspire Home Loans Fast Facts

Direct-to-consumer mortgage lender
Offers home purchase loans
Founded in 2016, headquartered in Newport Beach, CA
A wholly owned subsidiary of Century Communities
Parent company is publicly traded (NYSE: CCS)
Licensed to lend in 18 states across the nation
Funded about $2 billion in home loans in 2022
Most active in California, Colorado, Georgia, and Texas
Also operates a title company and insurance agency
Known for offering big mortgage rate buydowns

Inspire Home Loans is a wholly owned subsidiary of Century Communities, which offers to-be-built and quick move-in homes in a handful of states nationwide.

Their parent company consider themselves a top-10 home builder nationally, and is publicly traded under the NYSE symbol CCS.

The lending division has been around since 2016 and is headquartered in Newport Beach, CA.

Their primary focus is providing home purchase loans to buyers of newly-built homes in the many communities they operate throughout the country.

They are licensed in 18 states, including Alabama, Arizona, California, Colorado, Florida, Georgia, Indiana, Louisiana, Kentucky, Michigan, Nevada, North Carolina, Ohio, South Carolina, Tennessee, Texas, Utah, and Washington.

Per HMDA data, they are most active in the states of California, Colorado, Georgia, Nevada, and Texas.

They’ve currently got 63 sponsored mortgage loan originators (MLOs) on their staff per the NMLS.

Similar to other builder-affiliated lenders, Inspire Home Loans also operates a title insurance and settlement company called Parkway Title, and an insurance agency called IHL Home Insurance Agency.

This means you can do one-stop shopping for all your home loan needs, though it’s always prudent to shop around for these third-party services as well.

How to Get Started

You can either visit a Century Communities new home sales office to get paired up with a loan officer, or simply go online.

If you go to their website, you can click on “Pre-qualify Today” to access a loan officer directory that lists the many communities operated by their parent company.

After selecting a state, you’ll be able to select a community to see which loan officers serve that particular development.

From there, you’ll see contact info and you’ll have the ability to get pre-qualified for a mortgage or log in if you’ve already applied.

Their digital loan application is powered by fintech company nCino. It allows you to eSign disclosures, link financial accounts, and complete the app from any device.

Once you’ve applied and been approved, you can satisfy conditions electronically by uploading necessary documents 24/7.

You’ll receive automatic status updates as your loan makes it from underwriting to closing.

You can also lean on your dedicated, human loan team that is available to assist and provide answers whenever you have questions.

They appear to offer a good balance of both tech and human touch to get you to the finish line.

And because they are affiliated with the builder, they’ll be able to communicate freely and keep your loan on track based on construction status.

Loan Programs Offered

Conforming loans backed by Fannie Mae and Freddie Mac
Jumbo loans
FHA loans
VA loans
USDA loans
Fixed-rate and adjustable options available
Down Payment Assistance
Municipal Bond Programs

As noted, Inspire Home Loans exists to serve buyers of Century Communities properties.

Since that’s all they focus on, they should have a good handle on the process.

In terms of loan choice, they’ve got all the major loan programs a home buyer could need, including conforming loans, jumbo loans, and the full array of government-backed loans.

This includes FHA loans, VA loans, and even USDA loans if purchasing a property in a rural location.

Both fixed-rate and adjustable-rate mortgage options are available, including the 15-year fixed, 5/6 ARM, and 7/6 ARM.

Additionally, they’ve got access to numerous homebuyer assistance programs, including down payment assistance and municipal bond programs.

These can come in handy if you’re short on down payment funds and/or need help with closing costs.

The Ascent Club

Inspire Home Loans also offers free access to a program called “The Ascent Club.”

It provides financial insights and recommendations to help prospective customers reach their homeownership goals.

This could include learning how to save for a down payment, how to build asset reserves, how to boost credit scores, and even improve your DTI ratio.

The goal is put homeownership within reach if there are certain fixable barriers that are holding you back.

And whether you’re a first-time home buyer or seasoned pro, they conduct free webinars to answer any mortgage questions you may have.

Inspire Home Loans Rates and Fees

They don’t list their mortgage rates or lender fees online, which isn’t atypical. But I do give lenders kudos when they do. It’s a plus from a transparency standpoint.

So we don’t know how competitive they are relative to other lenders, nor do we know if they charge a loan origination fee, underwriting and processing fees, application fee, and so on.

Be sure to inquire about any and all fees when you first discuss loan pricing with a mortgage loan officer.

Once you get a rate quote, that along with the lender fees makes up your mortgage APR, which is a more effective way to compare loan costs from lender to lender.

Despite the lack of information, they do advertise mortgage rate buydowns on their home builder website.

And from what I saw, they were some of the biggest permanent and temporary mortgage rate buydowns around.

One example offered a 2/1 buydown to 3.5% for the first year, 4.5% in year two, and 5.5% fixed for the remaining 28 years.

That’s pretty tough to beat when mortgage rates are close to 7.5 today%

But as always, take the time to shop your rate with other lenders, credit unions, mortgage brokers, and so on.

Inspire Home Loans Reviews

Over at experience.com, Inspire Home Loans has an excellent 4.89/5-star rating from over 1,500 customer reviews.

However, they have a 1.8/5 on Yelp from about 30 reviews, though the sample size is obviously quite small. At Redfin they have a better 4.4/5 from 7 reviews, which again is a small sample.

You can also search their individual offices throughout the country on Google to see reviews by location. This could be more helpful if you work with a particular regional office.

Their parent company has an ‘A+’ rating on the Better Business Bureau (BBB) website and has been accredited since 2015.

Despite the solid letter grade rating, they’ve got a poor 1.05/5-star rating based on over 100 customer reviews. This could have to do with their numerous complaints filed over the years.

Be sure to take the time to read through some of them to see how many pertain to their lending division versus their new home building unit.

Of course, chances are if you’re using Inspire Home Loans to get a mortgage, you’re also buying a Century Communities property.

To sum things up, Inspire Home Loans has the latest tech, a good array of loan programs, and may offer pricing specials that outside lenders can’t compete with.

They have some mixed reviews, but mostly positive ones, though your mileage may vary depending on who you work with.

But even if the process has hiccups, the savings from a big mortgage rate buydown could be worth it.

Still, take the time to shop third-party lenders, brokers, banks, etc. With other offers in hand, you can negotiate and potentially land an even better deal.

Inspire Home Loans Pros and Cons

The Good

Digital mortgage application (can apply for a home loan online)
Mostly paperless loan process powered by nCino
Lots of loan programs to choose from including homebuyer assistance
Mortgage rate specials for buyers of Century Communities homes
Lots of excellent customer reviews
Free access to The Ascent Club
A+ BBB rating
Free smartphone app

The Maybe Not

Aren’t licensed in all states
Do not list rates/fees online
Only offer home purchase loans
High number of customer complaints
May not service your loan after closing

Source: thetruthaboutmortgage.com

Apache is functioning normally

November 9, 2023 by Brett Tams

Oklahoma is more than OK in these reasonably priced metros.

Oklahoma is a lot of things, and not a lot of things. It’s in the South, but not genteelly Southern. It sits across the Red River from Texas, but most certainly not Texas. And it’s at the bottom end of the Great Plains but doesn’t have flowing fields of wheat and corn.

Oklahoma is dusty but contemporary. It’s diverse but steeped deep in Indigenous tradition. It’s the NBA, but also Bedlam. And from modern skyscrapers to a long, endless panhandle, it’s an inviting place to live.

Luckily, it’s also an affordable place to live. Rents are low and mostly reasonable. And options are diverse. The state features gleaming cosmopolitan cities, college towns, independent suburbs, close-knit farm communities and much more.

But with such a cheap state to live in, what are the cheapest places to live in Oklahoma? Where can the most affordable rental cities be found?

Average rent prices in Oklahoma

First, let’s take a look at rent prices in Oklahoma as a whole. Overall, the Sooner State is a fairly inexpensive state in which to live.

The average rent for a one-bedroom apartment across the state is $733. That’s a good bargain price for most renters. In fact, all but one of the cheapest places to live in Oklahoma fall below that figure.

Much of the country has seen a significant jump in prices from this time last year. However, Oklahoma remains fairly consistent. That number is up just two and a half percent from a year ago.

The cheapest cities in Oklahoma for renters

There are a number of reasons Oklahomans are looking for cheaper places to live, or assessing the price of where they currently reside. Among all the cities and towns in the Sooner State, what are the most affordable for renters? Below are the 10 cheapest places to live in Oklahoma.

10. Sapulpa

Average 1-BR rent price: $737
Average rent change in the past year: +1.38%

Like many below, Sapulpa is an Oklahoma city born as a railroad town and modernized as a stop on old Route 66. Today, it sits as Tulsa’s fourth-largest suburb, with a population of 22,000, fourteen miles from downtown. Sapulpa remains a commuter town, mostly residential with small pockets of service shops and fast-food restaurants. Its primary commercial strip is along the Dewey Avenue corridor, part of Route 66.

As a residential district, Sapulpa has a plethora of parks and green spaces. The town offers over 500 acres of land spread out among two dozen parks and recreation facilities. As well, there are nearly five miles of running and biking trails along five designated park paths around Sapulpa. For water enthusiasts, Sahoma and Pretty Water Lakes cover 300 acres combined. The destination is known for its excellent fishing, with stocks of trout and catfish.

“Oklahoma’s Most Connected City” is also one of the cheapest places to live in Oklahoma. On average, a one-bedroom apartment in the growing suburb leases for $737 a month.

9. Oklahoma City

Average 1-BR rent price: $711
Average rent change in the past year: -13.90%

Oklahoma has “plenty of air and plenty of room to swing a rope, plenty of heart and plenty of hope,” according to its eponymous musical. At its heart is its capital and largest city of Oklahoma City, with more than its fair share of that plentiful air and room. At over 600 square miles, O.K.C. is the second-largest city in the continental U.S. by area with a population of more than 100,000 residents.

The city where the wind comes sweepin’ down the plain is more than its roots as an oil and cattle town. “Oklahoma City is mighty pretty,” sings Nat King Cole on his hit “(Get Your Kicks on) Route 66.” Anyone who has visited O.K.C. can confirm that statement’s validity. It’s a bustling city of vibrant neighborhoods, close-knit communities and big business sectors. More than a fossil fuel hub, Oklahoma City is a leader in tech, healthcare and even sustainable energy.

It’s been a quarter-century since the attack at the Murrah Federal Building and two decades after the Moore tornadoes. The city has taken great strides in rebuilding, as well as revitalizing its city center. Downtown’s Bricktown entertainment district is one of the most vibrant in the Great Plains.

However, rents have remained affordable throughout the city. An average one-bedroom apartment runs $711 a month on average, a 14 percent drop over the last 12 months.

8. Tulsa

Average 1-BR rent price: $695
Average rent change in the past year: +1.30%

Be sure to take note, Tulsa is not some sleepy Midwest oil town. The city, one of the 50-largest in the nation, centers a metro area of over a million residents. It presents as modern, clean and metropolitan, more so than its larger neighbor and state capital to the west. It’s a city of big money, Great Plains skyscrapers and a bustling downtown with its gleaming BOK Center.

Tulsa is a growing tech, healthcare and finance hub, not to mention great for beef lovers. It offers a diverse population, over-40 percent non-white, and a rich history. Its cosmopolitanism has allowed it to become the leading arts, culture and nightlife destination in the Sooner State.

The Tulsa Zoo was voted “America’s Favorite Zoo.” The Linde Oktoberfest is ranked one of the top German celebrations and food festivals in the nation. And don’t forget the barbecue. Tulsa staples RibCrib, Billy Sims Barbecue and Oklahoma Joe’s are shipped across the country.

An affordable locale in the up-and-coming Ozark Plateau region, Tulsa is attractive to renters. The cheapest large city in Oklahoma, one-bedroom rents sit just under $700 on average.

7. Stillwater

Average 1-BR rent price: $668
Average rent change in the past year: +3.88%

Oklahoma State fans will be happy to find out their beloved Cowboy town is one of the cheapest places to live in Oklahoma, while the Boomer Sooners’ Norman failed to rank. One-bedroom apartments in the Frontier Region college town of Stillwater rent for an average of just $668 a month.

Stillwater — equidistant from Oklahoma City, Tulsa and the Kansas border — is a full-fledged Southern Plains small city college town. Washington Irving described it as a “glorious prairie spreading out beneath the golden beams of an autumnal sun.” Activity obviously centers on the university, but Stillwater offers plenty for urban living, as well. The city of 45,000 offers a number of museums, cultural institutions and a legendary music scene. It’s even home to the National Wrestling Hall of Fame.

But Stillwater is still chock full of college town favorites. World-famous sports bar Eskimo Joe’s is a hub for students, music enthusiasts, ‘Pokes fans and T-shirt-toting tourists. It even was named “Best College Post-Game Hangout,” as well as serving “America’s Greatest Cheese Fries.” The bar sits steps from both 60,000-seat Boone Pickens Stadium and Gallagher-Iba Arena, one of the oldest in the NCAA.

6. Midwest City

Source: ApartmentGuide.com

Average 1-BR rent price: $575
Average rent change in the past year: -12.09%

Most cities at the top of this list are old homestead towns that boomed when the railroad came through. Not Midwest City. O.K.C.’s third-largest suburb, Midwest City only dates back to World War II. The city was created around the then-new Tinker Air Force Base.

Thanks to considerable media attention, it quickly became a national model for community development after the war. A grocery store opened, a hospital, a junior college and a mall soon followed. By 1970, the city that rose out of empty land had nearly 50,000 residents.

Like several of the other cheapest places to live in Oklahoma, the military base is still the focal point of the town. But the heart of residential Midwest City lies in its thriving central business district. The commercial district lies across I-40 from the base. Revitalized at the turn of the century, the city’s main street follows SE 29th Street and centers on bustling Town Center Plaza. The area features big box stores, a walkable row of national chain casual dining and Tinker Bicentennial Park.

For suburban commuters to Oklahoma City or military families, Midwest City remains affordable. A one-bedroom apartment leases for an average of $575 a month. That figure has dropped over 12 percent since this time last year.

5. Enid

Average 1-BR rent price: $573
Average rent change in the past year: N/A

Just 30 miles from the Kansas border, Enid is the cheapest place to live in northern Oklahoma. Its proximity to Kansas explains its notoriety as the “Wheat Capital of Oklahoma.” In fact, the small city of 50,000 features the third-largest grain storage capacity in the world. This agricultural skyscraper city of silos is now the Enid Terminal Grain Elevators Historic District.

While Enid is still “where the best wheat grows and the oil flows,” there’s much more to the town life. Downtown Enid is low-slung among wide thoroughfares. That is except for the 14-story Broadway Tower, the tallest building in Enid. The district also features a children’s museum, railroad museum and western museum and Cherokee Strip Heritage Center. Enid even features the oldest symphony orchestra in Oklahoma.

The southern tip of town is occupied by the large Vance Air Force Base. With such a large military facility, affordable rental housing is important. An average one-bedroom apartment leases for just $573 a month.

4. Lawton

Average 1-BR rent price: $558
Average rent change in the past year: -7.95%

At just $558 a month for an average one-bedroom, Lawton is the cheapest city to live in southwestern Oklahoma. Significantly, rents in the Frontier Region city have dropped nearly eight percent from this time last year. With nearly 100,000 residents, it’s the fifth-largest city in the Sooner State.

Lawton’s primary landmark and largest employer is Fort Sill. The massive base on the north end of town is one of just four Army Basic Combat Training facilities in the U.S. While growth can be attributed to the base, the city has diversified into manufacturing, higher education and health care industries.

Unlike many cities, the focal point of Lawton’s downtown isn’t the main street or a town square. It’s the nearly 50-year-old Central Mall, an enclosed shopping mall smack in the middle of downtown. When built, city officials thought the mall would attract shoppers from surrounding suburbs. Today, renewal efforts are focusing on building more appealing and pedestrian-friendly blocks north of the mall.

Some of those revitalization efforts are centered on the area around Elmer Thomas Park. Here lie two of Lawton’s largest museums. The Museum of the Great Plains and Comanche National Museum and Cultural Center sit side-by-side adjacent to the park. The park is the city’s largest, but just one of 80 parks and recreation areas operated by the city.

3. Pauls Valley

Source: Facebook.com/CityofPaulsValley

Average 1-BR rent price: $554
Average rent change in the past year: +1.84%

Deep into the Chickasaw Nation is the small Interstate city of Pauls Valley. Grammar nerds take note, there is no apostrophe in “Pauls,” though named for original settler Smith Paul. The lack of punctuation can be attributed to a singular tradesman. In 1887, a painter hired by the railroad to hang the Santa Fe Railway station sign failed to add the possessive apostrophe and the name stuck.

Pauls Valley’s quaint downtown lies at the northeastern corner of the city. The district radiates out from the easement of the town’s historic railroad line. In its heart is the old Santa Fe Railway Lone Star depot. Closed in the ’70s, the century-old depot now houses the historical society museum. However, right next door is the active Pauls Valley Amtrak station on the Heartland Flyer train line. Despite the city’s diminutive size, it’s one of just five Amtrak passenger stations operating in Oklahoma.

Elsewhere, downtown features pizza places, diners, service centers and community shops along Grant Avenue and Chickasaw Street. It’s also home to the award-winning Toy and Action Figure Museum. In the city’s western portion, numerous hotels and truck stops lie at the exit to Interstate 35.

The largest city and county seat of Garvin County, Pauls Valley has a population of only 6,000. The city is quaint and also cheap. To live here will cost you $554 a month on average for a one-bedroom unit. That figure is just $2 more than the city ranked No. 1.

2. Ada

Source: Facebook.com/CityofAdaOK

Average 1-BR rent price: $553
Average rent change in the past year: N/A

Ada is a small but bright town in south-central Oklahoma. It’s the county seat and largest city in Pontotoc County, but with a population of just 17,000. It’s the second cheapest place to live in Oklahoma. At $553 monthly, the average cost of a one-bedroom is just a buck more than the number one city. Oh, so close.

Ada is best known as the headquarters of the surrounding Chickasaw Nation, which encompasses 7,700 square miles of southern Oklahoma. While Ada itself is nearly three-quarters white, a significant 15 percent of all residents are of Native American descent. Around 2,500 Ada residents speak Chikashshanompa’, the Chickasaw language. As such, much of the public signage, including many traffic and directional markers, is written bilingually.

Most commercial activity in Ada centers on the downtown area along Main Street and Mississippi Avenue. Native American shops and eateries mingle with fast-casual restaurants, outdoor outfitters, beer bars and locally owned boutiques. Off the east edge of downtown is the spacious campus of East Central University.

1. Shawnee

Source: Facebook.com/VisitShawneeOklahoma

Average 1-BR rent price: $552
Average rent change in the past year: +0.41%

On the eastern edge of the Oklahoma City metro is the satellite city of Shawnee. It’s convenient, modern and accessible. And this suburb of 31,000 tops the list of the cheapest place to live in Oklahoma. An average one-bedroom apartment runs just $552 a month.

Only 45 minutes from downtown OKC, Shawnee is a convenient commute into the city. But Shawnee maintains distinct independence. Its bustling Main Street sits alongside its historic railroad right-of-way. This design dates back to the city’s founding, eschewing a town square for a primary business thoroughfare. The district offers a number of coffee shops, comfortable bars and casual dining spots.

But Shawnee’s most famous restaurant was located a couple of miles north on North Harrison Street. That was the spot of the original Sonic Drive-In. Then known as Top Hat Drive-In, the original site was moved in 2017 to the corner of Harrison and Highland streets.

Located downtown is the brand new Pottawatomie County Museum of railroad and transportation history. The new building opened at the start of 2021 as the collection outgrew its old home. That original site was located in the adjacent historic, castle-like Santa Fe Depot. Shawnee is also home to the Heart of Oklahoma Exhibition Center that features both indoor and outdoor performance arenas. And on the north end of town is the Black Hawk Casino. The vibrant gaming center is operated by the Sac and Fox Nation.

The most expensive places to live in Oklahoma

There are plenty of options to finding the cheapest places to live in Oklahoma, and which is right for you. But the Sooner State isn’t all about affordability. There are plenty of pricier places to lay your head at night.

The five most expensive places to live in Oklahoma are primarily large suburban edge cities. In fact, both Oklahoma City and Tulsa’s largest suburbs — Moore and Broken Arrow, respectively — are among the most expensive. Nearly all have also seen large jumps in rent prices for an average one-bedroom from this time last year.

Methodology

Rent prices are based on a rolling weighted average from Apartment Guide and Rent.’s multifamily rental property inventory as of August 2021. Our team uses a weighted average formula that more accurately represents price availability for each unit type and reduces the influence of seasonality on rent prices in specific markets.

We excluded cities with insufficient inventory from this report.

The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

Source: rent.com

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November 9, 2023 by Brett Tams

A conventional home mortgage loan – one backed by private lenders instead of a government agency – is the most common type of financing used by home buyers. Conventional home loans offer several advantages and disadvantages that are important to understand.

Take the time to learn why many home sellers prefer buyers with conventional mortgage loans, the eligibility requirements, and what to consider if you have a different kind of mortgage loan or face rejection obtaining conventional financing.

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What is a conventional home loan and how does it work?

A conventional mortgage loan is a type of home loan that is guaranteed by private lenders such as banks, mortgage companies, and credit unions. It is not backed by any government agency like the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), or US Department of Agriculture (USDA), which guarantee non-conventional financing like FHA loans, VA loans, and USDA loans, respectively.

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Conventional loans follow guidelines set by Fannie Mae and Freddie Mac, federally-backed entities formed by the US Congress. These entities play a pivotal role in bolstering stability, liquidity (consistent access to funds on reasonable terms), and affordability to the mortgage market and the numerous lenders that offer home financing.

Freddie Mac and Fannie Mae facilitate this by purchasing mortgage loans from lenders. They either retain these loans in their portfolios or package the mortgages into mortgage-backed securities that are up for sale.

As with any type of home loan, lenders of conventional mortgage loans provide funds to qualified borrowers to purchase a property. In exchange, borrowers agree to repay the funds with a fixed-rate or adjustable-rate interest attached over a set term, such as 30 or 15 years.

“Because conventional loans are not supported by the government, lenders who offer them want to make sure you can bear the financial cost of paying back your loan, in addition to your other debts. So they impose certain qualification restrictions for conventional mortgage loans,” says Rinal Patel, a real estate investor and founder of Webuyphillyhome.com.

What are the pros and cons of a conventional mortgage loan?

Understanding these pros and cons of conventional loans will empower you to make informed decisions when securing home financing. So, let’s explore the merits and limitations of conventional mortgages to help you navigate this significant aspect of home buying.

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Conventional loans pros:

A higher loan limit than many government-backed mortgages
A remarkable degree of flexibility in their terms. Repayment periods can range from 10, 15, 20, 25, and 30 years. Some lenders even allow you to pick a customized loan term, such as 8 years.
Conventional loans are available with either fixed or adjustable interest rates. Note that adjustable rates remain fixed, but only for a period of time early in the term — typically the first 3, 5, or 7 years. During this initial fixed-rate phase, homeowners benefit from lower interest rates, potentially saving thousands.
Unlike government loans that can charge an upfront insurance fee ranging from 1% to 4% of your loan amount, conventional loans do not impose an initial mortgage insurance fee, regardless of whether or not you make a down payment of less than 20%. However, If you put down less than 20%, you will need to pay monthly mortgage insurance premiums.
A wider variety of lenders offer conventional loans, making it relatively easier to find lenders offering these loans compared to government-backed alternatives.
Virtually any borrower and home location is eligible for a conventional loan (if you meet the lender’s requirements). On the other hand, to get a VA loan, you must be an active military member, veteran, or surviving spouse, and USDA loans limit the locations where you can purchase a home.
Sellers are typically more willing to accept an offer from a buyer preapproved for a conventional loan.

Conventional loans cons:

You may pay a higher fixed interest rate, especially if you have a lower credit score.
Lenders typically uphold stricter eligibility criteria and may require a higher minimum credit score than those offering government loans.
While some conventional loans can be secured with as little as 3% down, some lenders may require you to make a down payment of at least 20%. Government-backed loans, on the other hand, allow you to secure them with as little as zero down to 3.5%.
You’ll typically need to pay monthly mortgage insurance premiums with a conventional loan if you put down less than 20%. It’s important to note that there are ways to work around this and opt for single premium or split premium MI. In these cases, the MI can be paid for upfront by the buyer, seller or lender. It can even be financed into the loan amount in some cases. USDA and VA loans do not have a monthly mortgage insurance requirement.
Closing costs could be higher for a conventional loan than a government-backed loan.

Who qualifies for a conventional loan?

To be eligible for a conventional mortgage loan, you have to meet particular criteria that demonstrate your financial readiness.

“While credit score requirements may vary, a minimum credit score of around 620 is generally preferred. Aiming for a higher score can bring you better interest rates and terms,” explains Alex Shekhtman, CEO and founder of LBC Mortgage.

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Conventional loan lenders also look closely at your debt-to-income ratio (DTI), which measures how much of your income goes toward debt payments. You may not qualify for a conventional loan if your DTI is over 50%.

Additionally, conventional loan requirements vary across lenders. You may have the option to put down as little as 3%, but if you make a down payment of less than 20%, you will need to pay for private mortgage insurance

“Loan-to-value ratio (LTV) is a factor that lenders evaluate. A lower LTV ratio indicates less risk and showcases your financial stability – strengthening your chances of securing a conventional loan,” adds Shekhtman, who notes that the max LTV allowed for a conventional loan is 97% (which means you will need to put down at least 3%).

Why home sellers prefer conventional loans

There are several reasons why home sellers typically prefer to work with buyers who have conventional mortgage loan financing lined up over other types of financing.

“By offering greater flexibility in fewer restrictions, conventional loans can make the home sale process smoother and more efficient while also providing a sense of financial stability and responsibility on the part of the buyer,” says Adie Kriegstein, a licensed real estate salesperson for Compass Real Estate in New York City.

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Reason #2? “Conventional loans often require higher down payments. A seller can view this as a sign of financial responsibility, which can give them greater confidence in the sale,” Kriegstein continues.

Consider that FHA, VA, and USDA loans may come with more stringent requirements and restrictions, which could make the seller concerned that the deal may not close as expected.

“For example, FHA loans require mortgage insurance premiums, which can increase the overall cost alone,” says Kriegstein. “VA loans may have specific rules around the condition of the property, which can limit the pool of potential buyers or it and USDA loans may only be available for properties in certain rural areas.”

Erica Davis, brand manager for Guild Mortgage in Myrtle Beach, South Carolina, agrees that conventional loans help put sellers at ease.

“When sellers put their home up for sale, they want to ensure that the deal will close quickly and without any unnecessary stress. With a conventional mortgage loan, the process is often more predictable. And conventional loans often come with more flexibility in terms of negotiating prices and contingencies,” says Davis.

Tips for non-conventional loan borrowers

If you can’t qualify for a conventional loan, you can always pursue government financing in the form of an FHA loan, VA loan, or USDA loan, provided you meet the specific eligibility criteria for each loan program.

Truth is, buyers with non-conventional loans can still find sellers who are willing to complete a home transaction with them – even though it may take longer, according to Patel.

Check your home buying options. Start here

“If you have non-conventional financing, you can improve your chances of convincing a seller to work with you if you make a more serious offer on the house, one that shows that you are ready and intently interested in purchasing the property,” she suggests.

Additionally, “you should work to improve your credit score and save for a larger down payment if possible,” advises Kriegstein.

To improve your odds of getting a seller to accept your offer when a non-conventional loan is involved, “consult closely with a mortgage professional who can help you navigate the financing process,” Shekhtman recommends.

The bottom line

Assuming you qualify for a conventional mortgage loan, you’ll stand a better chance of choosing from a wider variety of homes for sale in various locations and convincing a seller to accept your offer.

But don’t despair if you’re not immediately eligible for conventional financing. Partner with a trusted lending expert who can guide you through the process and recommend alternative loan options tailored to your needs.

Time to make a move? Let us find the right mortgage for you

Source: themortgagereports.com

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November 8, 2023 by Brett Tams

If you’re getting ready to buy your first home, there are probably thousands of questions running through your mind. Questions about location, real estate services, expenses, and more — it’s a huge financial commitment and you probably want to make sure you have the best chance at getting exactly what you want. While it can be a difficult process to navigate, there is help for first-time homebuyers, from resources and advice to first-time homebuyer programs to help you finance a home.

If you’re worried you won’t ever be able to purchase a home, take a deep breath and a good look at your finances. You can start by reviewing your current financial situation and beginning to save for a down payment. (There are investment accounts and savings options that can help you reach your goal of buying a home, too.) Here are 12 helpful tips for first-time homebuyers.

1. Know Your Credit Score

Your credit score is typically very influential in determining what kind of interest rate you can get on a home mortgage loan. You can get one free credit report from each of the three major credit bureaus (Equifax®, Experian®, and TransUnion®) every 12 months, and may also be able to view free reports more frequently online. You can review your credit report to spotlight any errors that may affect what lenders are willing to offer you.

If you find any errors, you can report them and have them removed. This process can sometimes take a while, even if the mistakes are obvious, so consider starting a credit report review early on in your home-buying process.

2. Calculate What You Can Afford

Do you know how to figure out how much house you can afford? While the size of your mortgage is generally determined by an evaluation of your personal finances and debt, there are a few rules of thumb that may be relevant.

One general guideline is that your housing costs, including your mortgage payment, should, ideally, be no more than 28% of your gross monthly income.

If you are paying off student loans, credit card debt, or have a car payment, you may want to adjust your budget accordingly. Some people try to keep their debt to 36% of their gross monthly income, so that they can still prioritize financial goals like saving for retirement. (This is just another rule of thumb and everyone’s financial goals are different.)

And having less debt may make you more appealing to mortgage lenders. Understanding how much money you feel comfortable spending on a house can, in turn, impact the properties you consider. As you build your budget, you can also check out SoFi’s mortgage calculator.

3. Look into First-Time Homebuyers’ Programs

While you are evaluating your options and creating your budget, it could be worth looking into some first-time homebuyers’ programs. Some programs offer down payment and closing cost assistance, or loans with reduced interest rates.

There are a variety of options available for first-time homebuyers looking for assistance. For example, the Federal Housing Administration offers a mortgage insured by the FHA. These loans often come with competitive interest rates and allow for smaller down payments.

The USDA also helps first-time homebuyers with a program focused in rural areas. And the VA loan program provides assistance to active duty military members, veterans, and surviving spouses. There are even more first-time homebuyer programs and loans available from various states as well.

4. Understand the Expenses

There are plenty of other expenses that come with purchasing a home beyond your down payment and closing costs. For example, when you’re renting property, you don’t have to worry about property tax or general maintenance. When you own property, you do.

In addition to property tax, you’ll likely also need insurance to protect your new home. And you’ll be responsible for maintaining the property, of course, which can include painting, replacing windows, updating the roof, replacing appliances, and more regular maintenance and upkeep.

You may also need to factor in additional purchases like a lawn mower or professional landscaping if the property you are looking at has a yard. Will you need to buy a snowblower to clear the driveway during long winters? These are all factors that can come into consideration when figuring out the cost of your new home.

Check out our Home Affordability
Calculator to estimate how much house
you can afford.

💡 Quick Tip: Jumbo mortgage loans are the answer for borrowers who need to borrow more than the conforming loan limit values set by the Federal Housing Finance Agency ($726,200 in most places, or $1,089,300 in many high-cost areas). If you have your eye on a pricier property, a jumbo loan could be a good solution.

5. Remember that Location Matters

Location is, obviously, important to many buyers. In some cases, you may have to decide if being in the neighborhood you want is more important than having extra square footage or other, similar trade-offs.

If you have kids or are planning to, you will likely be considering the school district each potential property falls in. Even if you aren’t planning to have kids, it could be worth considering the school district since it can have an impact on the value of your property and could make it easier to sell the house down the line.

6. Plan for the Future

Zoning laws and development plans are another factor to consider when house-hunting. If there is undeveloped land nearby, it can’t hurt to do some digging and see if there are any plans for development.

It may also be worth looking into the property value of other homes in the area. Have they been declining in recent years? If so, this could impact the future value of a home you’re considering.

7. Use Your Imagination

When shopping around for houses, you can take the opportunity to look at a property’s potential, as well as its current value. It’s easy to be distracted by the current owner’s décor, paint, carpet, or other factors that are easy to change. You can easily repaint or update the appliances, but you won’t be able to adjust the location, floorplan, or add rooms to the home as easily.
💡 Quick Tip: Backed by the Federal Housing Administration (FHA), FHA loans provide those with a fair credit score the opportunity to buy a home. They’re a great option for first-time homebuyers.

8. Reserve Cash for Home Improvements

When you’re getting ready to put a down payment on a house, it may be tempting to clean out your savings account. And while that’s completely understandable, keeping your emergency fund close at hand may be a good idea when becoming a homeowner.

After closing costs have been sorted out and you’ve moved into your new home, you might find that unexpected repairs pop up. Having a reserve stash of cash can be helpful if the roof in your new home starts leaking, or you need to replace an appliance.

9. Get a Real Estate Agent

With all of the housing apps and free resources available on the internet, it may seem like a real estate agent is unnecessary. But in reality, navigating the housing market can be tricky and hiring an agent up front can save you time and help make your home-buying experience easier.

While you could spend your time going to open houses and scouring real estate listings, an agent can tailor the home search so that you spend less time looking at houses that don’t meet your criteria. They also can have access to new listings that aren’t yet on the market and may be willing to “preview” homes for you. A real estate agent can also help you navigate the intricacies of contract negotiations and paperwork. If you’re wondering how the real estate agent gets paid take heart: They are typically paid from the seller’s proceeds.

10. Know What to Expect from a Home Inspection

Having a home inspection completed is a critical step in buying a home. Inspection procedures vary from state to state, so it can be important to understand what is included in the home inspection in your state, since this is a great chance to truly examine the property and uncover any issues—before they become your issues.

Inspectors should have access to every part of the house including the roof and crawl spaces, and you should be able to attend the inspection yourself.

Don’t be afraid to ask the inspector questions; the more information you have, the better prepared you can be to decide if this is the right house for you.

11. Negotiate the Offer

You’ll have an opportunity to negotiate when you’re making an offer on a house. A lot of factors can influence an offer and negotiating terms in your favor could result in serious savings, especially if you are in a buyer’s market.

If you are working with a real estate agent, they can help give you a good idea of what is considered a reasonable purchase bid by providing comparable sales. A “comparable” is a home similar to the one you are considering (and in the same condition and location) that has sold in the last three months. An agent can help give you an estimated price range and manage your expectations.

12. Find the Right Mortgage

Before committing to a mortgage, it’s smart to shop around and see what various lenders are willing to offer you. A few things to consider include the interest rates, loan terms, application process (Is it lengthy? Online only?), and any hidden fees included in applying for or repaying the mortgage. Familiarize yourself with the different types of mortgage loans available during this shopping process.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

Photo credit: iStock/PeopleImages

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

SOHL1023236

Source: sofi.com

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November 7, 2023 by Brett Tams

Rental, Renovation, Fee Collection, Subservicing, Verification Tools; Training and Events

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Rental, Renovation, Fee Collection, Subservicing, Verification Tools; Training and Events

By:
Rob Chrisman

2 Hours, 11 Min ago

Yes, WeWork has filed for bankruptcy, but if you look at GDP and employment, our economy is doing pretty well. Did you know that the Dallas metro area is home to the headquarters of companies responsible for originating 78 percent of residential volume? You probably didn’t, as I just made that up out of thin air. Texas’ growth and not having state income tax both help. Here in Dallas at the TMBA Education Symposium, there is plenty of discussion about the industry incorporating non-traditional products into their lineups, such as reverse mortgages, bond programs, buydowns, renovation loans, construction to perm financing, and jumbo loans, all have value to lenders. Meanwhile, loan originators are looking at a “full stack” loan origination & processing platform like Realfinity.io to go “independent” allowing them to get the most competitive pricing directly from wholesale lenders with no overlays due to corporate expenses. (No, this is not a paid ad… Check out this WSJ article which really opened my eyes. To learn more about going independent reach out to Luca Dahlhausen.) Today’s podcast can be found here, and this week is sponsored by nCino makers of the nCino Mortgage Suite. With three products tailored to the needs of the modern mortgage lender, nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics unite the people, systems, and stages of the mortgage process. Hear an interview with nCino’s Jay Arneja on the company’s rebrand and the seamlessness of the nCino Mortgage Suite.

Lender and Broker Software, Products, and Services

Is down payment assistance (DPA) actually making an impact in a brutal housing market? The answer is a resounding “yes” according to a newly released Urban Institute (UI) study. UI partnered with Down Payment Resource (DPR) to analyze 2022 HMDA data and DPA data from the 10 largest MSAs. Among the findings, 43.6% of purchase loans were potentially DPA-eligible. 36.7% of declined loans fell through because of DTI. 30.7% of declined loans (46,370) could potentially have been salvaged with DPA. This is especially relevant because it shows that DPA can prevent more declined loans by improving DTI ratios, a growing issue as interest rates rise. To get insight into how many DPA programs are available to help you save declined loans in your service area, schedule a demo with the DPR team.

Servbank is dedicated to creating excellence with every customer and client experience. Having personally experienced how subpar service can negatively impact your businesses and brand, we have consistently elevated our own standards through substantial investments in our people and technology to ensure we are delivering a consistent, best-in-class experience at every interaction point. Our efforts have yielded remarkable results: a 92% first-call resolution rate, a 99% customer satisfaction score, an 85% Net Promoter Score, with wait times of under 10 seconds. This forward-thinking commitment to creating excellence with every experience has positioned Servbank as a market leader and one of the nation’s 10 largest subservicers. As a genuine, collaborative partner, Servbank has the capability and determination to enhance your brand, keep your customers loyal, and improve your bottom line. Ready for a subservicer who goes above and beyond? Partner with Servbank.

Now available: New MERS® Automated Lien Release™ Now, loan servicers and sub-servicers can optimize efficiency and accuracy on process lien releases, all while significantly lowering cost, with the recently announced MERS® Automated Lien Release. Leverage the combined power of the MERS® System and the Simplifile® Document Builder lien release framework to streamline the lien release process for loans registered with MERS®. When a paid-in-full transaction is completed on the MERS® System, this triggers the creation of a compliant lien release package and processing workflow in Document Builder. With pre-populated compliant document templates, Automated Lien Release ensures accuracy and compliance with the latest regulatory requirements. By leveraging the loan updates already sent daily to MERS®, the solution is compatible with the servicing platform you use today, alleviating implementation challenges. Click here to learn more.

While the industry strives for a “fully digital” real estate transaction experience, we cannot lose sight of how important it is to make it easier for loan officers and other staff members to do their jobs. The experts at ICE understand this, which is why any new solution that is developed prioritizes the back-office experience just as much as the front-end experience. As EVP of Product Strategy Sandra Madigan tells HousingWire in a new interview: “You can put the most incredible technology in front of the consumer, but if you don’t work on streamlining the back-end part of the process, you have not delivered effective technology.” Read her full interview here, and see how ICE Mortgage Technology is digitizing the mortgage and servicing processes, while still providing the human-guided experience borrowers want.

It’s no secret. The industry is going through tough times, and Xactus, the leading verifications provider, is here to help guide you in navigating through these challenges. It anticipates credit costs will soon increase as much as 30-100 percent due to several external factors including inflation and out-of-pocket fees. This will, in turn, have a far-reaching impact on all lenders. At the MBA Annual, we heard a lot of “Survive until ’25.” But how is a lender supposed to do that with these rising costs? One way is to work with a partner like Xactus who has the experience to help you strategically review processes to efficiently and cost-effectively manage milestones, improve workflows, optimize outcomes and enhance margins. The right partner can even assist you with capturing market share by helping you mine leads within your existing portfolio and identify more prospects. That’s how lenders will survive until ’25 and eventually thrive. Collaborate more in ’24 with Xactus. Email Xactus today to schedule a consultation!

Sagent’s Five Principles for the Future of Servicing. A better homeowner experience begins, ends, and emanates out of simplified, unified operations, a key component as Sagent delivers on their future-of-servicing model for the industry at large. Check out their COO Marianne Sullivan’s latest blog, where she shares relevant intel about how an open ecosystem provides open opportunities to power a better customer experience while reducing total operational costs and powering real-time compliance for servicers. Read the full piece here where she breaks down their 5 guideposts for servicing innovation. (Spoiler alert: end-to-end servicing tech IS the future.)

Click button, collect fee. It’s as easy as that with Fee Chaser. No more missed appraisal fees. No more awkwardly taking down credit card numbers over the phone. No more data entry into the LOS. With Fee Chaser’s integration into Encompass® by ICE Mortgage Technology™, borrowers get a text message to pay a fee, and everything’s automatically updated including a receipt into the eFolder. Check out the borrower experience here.

Broker and Correspondent Programs

Every lender is looking for a competitive advantage in today’s tight lending environment. With AFR Wholesale® (AFR) take your Delegated Correspondent business to the next level. With competitive best effort and mandatory pricing, our partners can maximize their profitability. AFR will purchase a diverse program catalog, including completed Renovation, Construction, and Manufactured Homes on all program types. We are fully integrated with BAM and Resitrader for those who wish to shadow bid on their loans prior to signing up. Activate AFR in your pricing engine or contact the AFR Bulk Bid desk today or 973-298-8003. Not yet a partner? Sign up today to start taking action! Have questions? Contact AFR at afrwholesale.com, email us or call 1-800-375-6071.

Long-term Rental or Vacation Rental? Visio Lending is the nation’s leader in Non-QM Investor DSCR loans for buy and hold SFR rentals with nearly a decade of experience and over $2.5 billion in originations. No-DTI, 30-year terms, rate buy downs, free 45-day rate locks; I/O and Sub-1 DSCR options available. Through our top-notch Broker Program, brokers are able to earn up to 2 points YSP, and 5 points total. Visio Brokers can count on a designated Account Executive and in-house processing.

Training and Events, In-Person or Virtual

Deephaven Mortgage invites you to join its educational webinar “Opportunities in Today’s Mortgage Market With Deephaven and CoreLogic” on November 9th at 1:00 pm EST. Chief Sales Officer Tom Davis with Deephaven Mortgage and Chief Economist Selma Hepp, PhD at CoreLogic will discuss opportunities in today’s challenging mortgage environment. Selma brings extensive experience in analytics offering actionable and straightforward insights that are important to know. Selma and Tom will provide an update on the housing market, forecasts, demographic trends, and the non-QM products to expand offerings and increase volume. Don’t miss it! Register today.

A good place for longer term conference planning is to start is here, and click on “events” for conferences in the future.

Today, Tuesday, 11/7, is the next Mortgages with Millennials with Kristin Messerli and Robbie Chrisman. Tune in every Tuesday at 10AM PT to the weekly video show designed to empower mortgage professionals to tap into the millennial market. This show demystifies the psychology of first-time homebuyers and offers strategies to win more market share with a key segment of the market. Sign up for a weekly reminder with the link to join and a sneak peek into the next episode. Special guest Jordan Nutter, VP of the Influencer Division at NFM.

Join CAMP on today at 1PM PT to hear expert insurance panelists discuss why insurance companies are leaving California, what new regulations to expect, what are the best practices for your new home-buying clients and what happens if their insurance is cancelled.

Join NYMBA and Proof (formerly Notarize) for a webinar on operationalizing RON in New York, November 7th, 12-1pm. Learn the latest developments in New York State’s rollout of remote online notarization (RON) including the benefits for lenders, attorneys, and your customers. See a live demo of the Notarize platform and learn how RON can help your business from lending to servicing.

Discover what lies ahead in the world of home financing and interest rates with our upcoming webinar, “What Does the Road Ahead Look Like? Navigating Home Financing, Interest Rates, Planning, and More in 2024.” Join us on November 8th: Secure your spot now!

Tomorrow, looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Listen to a unique mix of age perspective, expertise, and charisma to the screen, ensuring that the information is not only educational but also entertaining. This week’s episode features respected attorney Brian Levy.

Join Optimal Blue for the next session in its hedging series, Wednesday, Nov. 8th at 11a.m. CT, Hedging 201: The Components of Pipeline Valuation. Take a deeper dive into the different components that make up your pipeline valuation. From data integrity to gain/loss reconciliation, this webinar will cover features and functionality that Optimal Blue’s hedging and loan trading services provide.

On Wednesday, November 8th at 11:30am–12:30 pm PT, join Orrick’s fourth session zoom conversation about what’s next in fair lending enforcement.

Join USDA Rural Development first live, virtual training for fiscal year 2024. Back to the Basics…SFHGLP Overview: 101 on Wednesday, November 8th | 2:00 pm – 3:00 pm ET.

Beginning in 2024, USDA-RD will be offering free monthly virtual live training events: USDA Rural Development 2024 training schedule.

Learn more about HFA Advantage® features and benefits, borrower eligibility, homebuyer education requirements and product enhancements. Register for a free Freddie Mac webinar on Wednesday, November 8, 2 pm – 3:30 pm ET.

The MBA of Eastern Pennsylvania is hosting its annual President’s Banquet on Thursday November 9, welcoming CNBC commentator Ron Insana for the keynote address. This event is open to members and nonmembers. Tickets can be purchased here.

Join Land Gorilla for an upcoming webinar on November 9 at 11 a.m. PT, “Florida Lien Law Overview For Construction Lenders,” which will cover statutory requirements and lender strategies for managing construction loans in the Sunshine State. If you can’t make the live session, register anyway and you will be sent the recording.

In support of the Credit Score and Credit Reports Initiative, FHFA will host a series of stakeholder forums. The initial topics will focus on the historical credit score files and the timing/sequencing of key project milestones. To register for any of the sessions outlined below and to stay up to date on future discussions, send your name, affiliation and contact information to [email protected]. Forum Schedule: Tuesday, November 7, 3-4 p.m. ET: Uses of Historical Data for Stakeholder Analysis. Tuesday, November 14, 3-4 p.m. ET: Sequencing of Project Milestones. Tuesday, November 28, 3 –4 p.m. ET: Uses of Historical Data for Stakeholder Analysis (cont’d). Tuesday, December 12, 3–4 p.m. ET: Sequencing of Project Milestones (cont’d).

In September, the CFPB included Loan Originator Compensation in its supervisory highlights. Are your compensation policies compliant? Register for the MMBA MLO Compensation Program Webinar on November 9th, 10:00 – Noon.

Friday the 10th is The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT, 3PM ET, in “The Rundown”. This Friday’s features David Karandish with Capacity.

Capital Markets

There was a big rally over the last week as the sentiment that the Fed could be done raising rates swept through markets, allowing Treasuries to build on gains. However, this week opened with substantial sales as a knee jerk reaction to how far bond yields fell over the past seven days. That selling hasn’t really put in a dent in how much yields have risen over the past 18 months and the last time U.S. government bond yields climbed so far, so fast, the nation plunged into back-to-back recessions. And even with markets firmly in “bad news is good news” mode, everyone who has predicted a downturn since early last year has been incorrect. Even with the chance of a rate cut in March increasing to nearly 25 percent, for now, the Fed will continue to feel the pressure to keep rates high to battle price surges.

Today’s economic calendar is light and kicked off with the September trade deficit ($61.5 billion, moving higher). Expectations were for the trade deficit to deteriorate to $59.2 billion from $58.3 billion with consumer credit increasing $15.0 billion following the surprising $15.6 billion decline in August. Later today brings September consumer credit, Redbook same store sales, a Treasury auction of $48 billion 3-year notes, and a litany of Fed speakers. We begin the day with Agency MBS prices better than Monday night by a few ticks and the 10-year yielding 4.62 after closing yesterday at 4.66 percent; the 2-year is at 4.94.

Employment and Transitions

Merchants Bank of Indiana, continues to grow. The Carmel, IN based Bank knows these are challenging times, but also sees opportunity. Having recently reached $16 billion in assets, they continue to leverage their diversified business model to grow market share and assist their lending partners. They offer Correspondent Lending, Non delegated and Delegated; a Dedicated Wholesale platform for Banks and Credit Unions; Retail Lending and Warehouse financing. Their LO centric platform along with the strength and balance sheet of the bank allows them to expand market share in their regional markets. Contact Ron Berry, Retail Sales Leader to learn more about their LO opportunities. With the TPO market experiencing frequent Investor shakeup their committed, focused, and growing TPO channel is worth a look. Contact Rob Wilson, Correspondent Sales Executive to learn more about their Servicing Released Non Delegated, Delegated platforms and their Financial Institutions dedicated BCU Mortgage Services platform.

FHA has two vacancies for a Housing Program Policy Specialist. Duties include monitoring and evaluating agency operations to ensure policies and standards are maintained, up-to-date, and in compliance with respective guidance and procedures. Resolve many types of program policy issues involving single family mortgages and appraisal/valuation requirements presented by field staff, lending institutions, and other housing interests. Collect, review, and analyze a variety of data including statistical information. Announcement 23-HUD-2577-P.

FHA is accepting applications for a Management and Program Analyst, Announcement Number 23-HUD-3104-P. Responsibilities include development of procedures and systems for assessing the effectiveness of programs/management processes. Analyze and evaluate on a quantitative/qualitative basis the effectiveness of line program operations in meeting established goals and objectives. Direct and develop plans for project teams or other groups in accomplishing/producing projects/studies.

FHA is hiring a Single-Family Housing Specialist. This position is responsible for providing technical assistance and advice to the Single-Family Homeownership Centers on matters concerning risk management and monitoring of program participants. Serve as technical expert on established policies and procedures for monitoring lender/servicer performance.

View Job Announcement Number 23-HUD-3102-P for all job duties.

FHA has an open position for a Deputy Director, Quality Assurance Division. Job duties include exercising full managerial authority in assisting the Director in the planning and execution of assigned program operations and functions. Provide technical assistance and advice to the Single-Family Homeownership Centers on matters concerning risk management and monitoring of program participants. Prepare bulletins highlighting notable trends for management in Headquarters and the Homeownership Centers. For details, view Job Announcement Number 24-HUD-141-P.

DocMagic has promoted Chris Lewis to the role of Director of Sales, tasked with “building on DocMagic’s success as a market leader while also driving strategic sales initiatives for the company’s new innovations.” “His primary goal is to lead a team of subject matter experts in offering a consultative approach. This approach assists lenders of all sizes in realizing the cost-saving benefits and operational efficiencies of eClosings, which are becoming more prevalent in the industry.”

Morgan Barnes has joined the Real Estate Connection team as Director of Lender Relations. “As a licensed Real Estate Agent with keen organizational expertise, Morgan is committed to offering streamlined industry support to our lenders and agent partners.”

Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

November 7, 2023 by Brett Tams

Is there such a thing as a 1 percent down mortgage? In other words, can you really make a 1-percent down payment when you buy a home? Well, you may be able to if you have a modest income and a 620 credit score.

But such mortgages are in their infancy. And only three lenders currently offer them. However, if they prove a success, others will likely join in and some of those may have easier eligibility rules. Already, one innovator is offering such a loan free of mortgage insurance.

Verify your home buying eligibility. Start here

In this article (Skip to …)

What is a 1 percent down mortgage?

The clue’s in the name. With one of these, you really do have to make only a 1 percent down payment when you buy a home.

The first 1 percent down mortgage was introduced as recently as April 2023. So, you can expect them to evolve quite quickly.

Undoubtedly, many mortgage lenders are watching how this innovation works out for the pioneers and their borrowers. If they like what they see, 1 percent down mortgages could become widely available mortgage programs.

Check your home buying options. Start here

How does one of these mortgages work?

The mechanics couldn’t be more straightforward. As long as you’re eligible, you bring 1% of the home’s purchase price to the closing. And the lender brings the other 2% as a gift. That’s a no-strings grant, which never has to be repaid.

Check your home buying options. Start here

In fact, it’s even better than that. Because, if you have a 3% down payment, the lender may still give you the 2% grant, taking your down payment to 5%. Just note that 5% seems to be the maximum under these programs.

Another thing to bear in mind is that a lender might have a cap on the grant it will provide. For example, UWM says it won’t chip in more than $4,000 in total.

Finally, be sure to study your mortgage quote (loan estimate) carefully. Because 1 percent down mortgages are still so rare, we haven’t been able to assess how competitive their interest rates and closing costs are compared with other home loans. So, it’s down to you to make sure you get a great deal.

Qualifying for a 1 percent down mortgage

There are two main qualifying hurdles for you to clear in order to be eligible for one of these loans. The first is straightforward: You need a FICO credit score of 620 or higher.

The second is a bit more complicated. It concerns something we mentioned earlier: a modest income.

But what does that even mean? Well, luckily, there’s a definition for these loans. It states that your income must be at or below 80% of the area median income (AMI) where you’re planning to buy.

Still unclear? You’re not alone. You can use a lookup tool on Fannie Mae’s website to check that AMI for your area. Multiply that by 80% (or .8 on a calculator). If your income is the same or lower, you can go ahead and apply. But, if it’s higher, you’re out of luck. Check out the other low down payment mortgages we mention below.

Rocket Mortgage gives an example of AMI in action: “You can’t qualify if you make higher than 80% of the median income in the area in which you’re looking to buy. For example, if you live in Macomb County, Michigan, the area median income is $90,800. You can’t use [earn] more than $72,640 to qualify for this ($90,800 ×.8 = $72,640).

UWM says its other qualifying criteria are the same as those for Freddie Mac’s Home Possible® or Fannie Mae’s HomeReady® loans. And we shouldn’t be surprised if other lenders have the same requirements. You may also find lenders restricting these mortgages to single-unit family homes for owner occupation.

Pros and cons of a 1 percent down mortgage

The 1 percent down mortgages can offer an enticing path to homeownership with minimal upfront costs, but they also have their pros and cons to consider.

Check your home buying options. Start here

The pros of these mortgages are apparent:

The lender gifts you 2% of the purchase price
First-time homebuyers can achieve their homeownership dreams more quickly than if they had to save up a 3% or 3.5% down payment
Your savings can be used for what you want: closing costs, furniture, and other financial goals.

The cons are:

Not everyone is eligible for this loan product
You need to be sure you’re getting a competitive deal overall
Your risk of spending some time with your home “underwater” (when your home’s value is less than your mortgage balance) is higher

It’s worth expanding on that last point. Having an underwater mortgage loan can trap you in your home. You can’t easily sell or refinance because you can’t “redeem” (fully pay back) your existing mortgage loan.

This doesn’t usually matter if you want to stay put anyway. In the past, average home values have typically recovered (and then some) fairly quickly. But, if you absolutely need to move during that underwater time, you can feel trapped. One escape route may be to rent out the home.

Lenders that offer a 1 percent down mortgage

At the time of writing this article, only three lenders offered these mortgages. Those are:

Check your home buying options. Start here

Rocket Mortgage

The Rocket Mortgage 1 percent down product is called ONE+ loan. And it is the one that charges no mortgage insurance. On a $250,000 mortgage, Rocket reckons that could save you $245 every month for an average of seven years. That’s more than $20,000 in total.

Rocket doesn’t specify a cap on its down payment grant but quotes an example of $6,000. So it’s more generous than UWM’s $4,000 cap.

Rocket Mortgage used to be called Quicken Loans and says it is America’s largest mortgage lender. It came top in the 2022 J.D. Power U.S. Mortgage Origination Satisfaction Study.

United Wholesale Mortgage (UWM)

Like Rocket, UWM says it’s “the #1 overall mortgage lender and purchase lender in the nation.” While they can’t both be No. 1, there are probably different data sources and ways of interpreting the numbers.

Borrowers can’t approach UWM directly. It operates through its partners, which are mortgage brokers, correspondents and financial institutions. So, you should ask brokers whether they can help get you a UWM Conventional 1% Down loan.

Zillow

The latest lender to offer 1 percent down mortgages is Zillow Home Loans, which launched its program in August 2023. At that point, its offering was available only in Arizona. But it said it planned to expand to other states.

In its launch press release, it is light on the details of its eligibility criteria for these mortgage loans and we are assuming that its income and credit score requirements are the same as the others.

Zillow expands on one of the benefits of its new home loans: “… by reducing the down payment loan amount to 1% of the purchase price, a home buyer looking to purchase a $275,000 home in Phoenix, Arizona, who makes 80% of their area’s median income and saves 5% of their income would need only 11 months to save for the down payment. By comparison, the same buyer who needed to save 3% of the purchase price would require two and half years (31 months) to save that amount.”

With Zillow offering 1 percent down mortgages now, it will be interesting to see how other lenders respond.

Other low down payment mortgage options

A few lucky people can qualify for a 0% down mortgage. And they might not be inclined to make even a 1% down payment.

Verify your home buying eligibility. Start here

Those are the people who are eligible for:

VA loans — You must be a veteran or service member or someone in a tightly defined and closely associated group. Surviving spouses are one example
USDA loans — You must adhere to income limits and be buying in a place designated as rural by the U.S. Department of Agriculture

If you can’t get one of those, you may be able to get a loan with a 3% down payment. Choose between Freddie Mac’s Home Possible® or Fannie Mae’s HomeReady® loans. But you’ll need a 620 credit score to qualify.

If your score is between 580 and 619, you could apply for an FHA loan. These come with a 3.5% down payment. However, if you have time, there are mortgage insurance advantages if you drive your score up to 620 and go for a Fannie or Freddie loan.

The bottom line

A 1 percent down mortgage could provide an exciting opportunity for those on modest incomes who wish to become homeowners. Your lender gifts you 2% of the home’s purchase price so that your total down payment on closing is 3%.

Providing you qualify in other ways puts you in line for a conforming loan, which meets Fannie Mae or Freddie Mac’s rules. And that provides real advantages for your mortgage insurance costs over an FHA loan.

Indeed, Rocket Mortgage says it won’t charge any mortgage insurance on its 1 percent down mortgage, which might save you $20,000+ compared to a standard Fannie or Freddie loan.

So, for those who can get them, these new mortgages can be great. Just be sure to check that your overall deal is competitive.

Time to make a move? Let us find the right mortgage for you

1 percent down mortgage FAQ

Can you put down 1% on a house?

Yes, if your income, credit score, and other circumstances meet the qualifying criteria for a 1 percent down mortgage. You could also do so if you’re eligible for a 0% down loan and choose to make a down payment, which might earn you a lower mortgage rate.

How does a 1 percent down mortgage work?

You put down 1% and your lender gives you a 2% grant, making a 3% down payment. That’s the minimum for a conforming loan from Fannie or Freddie and those typically offer attractive deals.

How do you get a 1% down mortgage?

If you think you’re eligible, apply on Rocket’s website, contact Zillow (Arizona only at the time of writing), or ask mortgage brokers about UWM’s product. Other lenders may begin offering these products soon so watch out for those.

Source: themortgagereports.com

Median Down Payments Highest Since 1997 for First-Time Home Buyers

Typical Down Payment for Repeat Home Buyers Up to 19%

How Much Do You Need to Put Down on a Home These Days?

What is a VA loan?

Who is eligible for a VA loan?

What are the credit requirements for a VA loan?

VA Loan Choices

Other Options for Home Loans with Bad Credit

FHA

USDA

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Bottom Line

How much does it cost to buy a house in Ohio?

Down payment

Closing costs

Cost to move

Homeownership costs

Reducing the costs to buy a house in Ohio

Next steps

FAQs

What is the average home cost in Ohio?

Are home prices dropping in Ohio?

Do buyers pay closing costs in Ohio?

Inspire Home Loans Fast Facts

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Inspire Home Loans Rates and Fees

Inspire Home Loans Reviews

Inspire Home Loans Pros and Cons

Oklahoma is more than OK in these reasonably priced metros.

Average rent prices in Oklahoma

The cheapest cities in Oklahoma for renters

10. Sapulpa

9. Oklahoma City

8. Tulsa

7. Stillwater

6. Midwest City

Source: ApartmentGuide.com

5. Enid

4. Lawton

3. Pauls Valley

Source: Facebook.com/CityofPaulsValley

2. Ada

Source: Facebook.com/CityofAdaOK

1. Shawnee

Source: Facebook.com/VisitShawneeOklahoma

The most expensive places to live in Oklahoma

Methodology

What is a conventional home loan and how does it work?

What are the pros and cons of a conventional mortgage loan?

Conventional loans pros:

Conventional loans cons:

Who qualifies for a conventional loan?

Why home sellers prefer conventional loans

Tips for non-conventional loan borrowers

The bottom line

1. Know Your Credit Score

2. Calculate What You Can Afford

3. Look into First-Time Homebuyers’ Programs

4. Understand the Expenses

Check out our Home AffordabilityCalculator to estimate how much houseyou can afford.

5. Remember that Location Matters

6. Plan for the Future

7. Use Your Imagination

8. Reserve Cash for Home Improvements

9. Get a Real Estate Agent

10. Know What to Expect from a Home Inspection

11. Negotiate the Offer

12. Find the Right Mortgage

Rental, Renovation, Fee Collection, Subservicing, Verification Tools; Training and Events

Option 1: Copy and send this link

What is a 1 percent down mortgage?

How does one of these mortgages work?

Qualifying for a 1 percent down mortgage

Pros and cons of a 1 percent down mortgage

Lenders that offer a 1 percent down mortgage

Check out our Home Affordability
Calculator to estimate how much house
you can afford.