The word “conventional” is often used in a negative manner, to denote, conservative, dull, conforming, old-fashioned behavior.

However, when you are shopping for a loan, do not let the words conservative or conforming discourage or mislead you.  A conventional, conforming, loan might be a great option for you in the current mortgage shopping environment.

Today, Palm State brings you a look at another fine option for your home mortgage:  the 97% LTV mortgage program.

 

The 97% LTV:  A Low Down Payment Plan!

The big news in 2015 is that “Fannie Mae and Freddie Mac released 97% LTV mortgage program to use for purchase and refinance.”  (LTV means Loan To Value.)

With a low down payment of three percent available, many house hunters who could not have bought a home in the past, can now afford a home.  Likewise, this same program can provide a “lower-equity refinance available to refinancing households.”

By the way, the down payment arrangement can be thought of as actually an extension of the existing MyCommunityMortgage (MCM) program, which was designed especially for such professions as firemen and teachers. If you are searching for a low down payment plan in official Fannie Mae documents, It is referred to as the “expanded LTV” program.Palm State helps home buyers with the perfect loan options and low down payment programs.

Perhaps the major points below will answer some of the questions you might have about this program.

1.  The 97% loan-to-value program is helping home buyers who might otherwise qualify for the loan. In plain language, you could make the payments, and cover your moving and living costs well, but you lack the ready cash to create a five percent or more down payment.
2.  It’s also “geared at homeowners whose homes have lost value since purchase but who are otherwise ineligible for the Home Affordable Refinance Program (HARP) because their loan start date is after May 31, 2009.”

At Palm State Mortgage Company, we believe that, as our economy recovers, it seems like Mortgage lenders are actually making it easier get average house hunters to be approved for a loan.

3.  In addition to first time buyers, repeat buyers are singing the praises of the 3 percent low down payment plan. Did you know, you might actually be a “first-time home buyer,” and not realize it.

In the eyes of  the financial world, you are a first-time home buyer if “you are a person who has not owned a home in the last three years.” Let’s repeat that idea:
“If you previously owned a home, but have not owned a home since three years ago, you are considered to be a first-time home buyer.” (This is not true for all loans, but it is true for this particular program.)

4.  You can still pay a low down payment of slightly more than 3 per cent and be part of the 97% LTV program, but you are out of this program if you want to pay 5 % or more.

5.  Faced with the low-down payment mortgage program via Fannie Mae and Freddie Mac and a FHA loan, some applicants want to know what is the best option. At Palm State, we advise clients to investigate each program, because they both have their benefits.

There is no “best” low-down payment mortgage program on record! This judgment depends on the circumstances of the individual taking out the loan. Every case is different. That is why Palm State is here for you, to help you discover the best deal for your financial situation.

We thank you for reading today’s blog. There is more learn about the 97 per cent LTV loan, and other options that make your home buying easier. So join us at this blog next week for Part Two!