Four years ago, the government put itself in competition for your mortgage business.
You’re going to like how this one turns out.
As a result of the competition, Fannie Mae and Freddie Mac now endorse low-down payment loans that make lower mortgage rates and cheaper monthly payments available to buyers — with less money down! — as compared to other government-backed low-down payment loans, such as the FHA loan.
The group’s loans were given brand names, too — HomeReady and Home Possible, respectively — to help lenders market the loans to home buyers more effectively.
But, as a buyer, you don’t care about the product names, do you? You only care what they do for you. Well, here it is:
- You can make a down payment of 3% on your house
- You can buy any type of house or home you want
- You can have any credit rating — from excellent or below-average
And, where the programs really shine is with their interest rates.
In order to help win business away from the other government agencies, Fannie Mae and Freddie Mac created interest rate subsidies for buyers with at least decent credit ratings.
Interest rates on HomeReady and Home Possible can be a half-percentage point or more below the rates for comparable low-down payment loans.
Eligibility for HomeReady and Home Possible is based on where you’re buying your house, and availability varies by census block.
Your lender can help you see if you’re eligible.
Are you a first time home buyer?
Let us know if you’ve done this before - whether you’re a seasoned pro or buying for the first time. We’ll share the perfect information with you as you need it.
Home buyers snatched up properties for sale in May as housing made its v-shaped recovery.