First-time home buying* just got easier and more affordable. There is a new type of loan out there that may be of interest. It’s the 3% down conventional loan, and it’s doing wonders for first-time home buyers like you.
*I have to preface this blog post with a strict definition of what a “first-time home buyer” is. Only those who have not owned any property in the past 3 years are considered a “first-time home buyer” and qualify for this type of loan. If two people are buying the home, only one needs to be a first-time home buyer.
Most recently, the loans most first-time home buyers have been selecting was either a 5% down conventional loan or an FHA loan requiring a 3.5% down payment. Now that the 3% down conventional loan is available buying a home has become a little easier and more affordable for first time buyers. So, if you’d like to own a home, you owe it to yourself to see if you qualify.
First of all, what is the 3% down conventional loan? This loan is a better alternative to both an FHA loan (where you put 3.5% down) and a standard 5% conventional loan because it allows you to qualify with a lower down payment and it makes your mortgage insurance (aka MIP or PMI) much cheaper. Plus, once you reach 20% ownership of the property, it drops off without being forced to refinance.
I consulted with Chad Trease, Senior Loan Officer at Prime Lending for more information.
“This is a great alternative loan through the Fannie and Freddie guidelines,” he explains. “This loan may open the gates for more homeowners.” Plus, according to Forbes, the 3% down payment conventional mortgage financing “does not handcuff borrowers to mortgage insurance forever like FHA MIP does.”
First-time homeowners still have the ability to utilize a 5% down conventional loan or an FHA loan to purchase their home but the 3% down loan maybe a better option. In addition, both the 5% and 3% down payments can be gifted if need be, allowing for even more flexibility.
First-time home buyers, now that buying a home is more possible than ever before, it’s time to contact me to schedule a consultation and learn more. Join me and Chad at our first-time homebuyers seminar on February 26 at 6:30pm at 11005 Metcalf Ave. in Overland Park to get even more helpful information about buying a home.