Financing a home in Loudoun County is about to become a bit easier and less expensive as a result of new programs announced in the last few weeks by President Obama and Freddie Mac.
The first announcement came from Freddie Mac in December 2014 where they announced a program that would allow for a 3% down payment called the “Freddie Mac Home Possible Advantage“. This program, along with a similar offering from Fannie Mae, gives home buyers a variety of options when purchasing a home with a low down payment (including the existing one with the Federal Housing Administration-FHA). Some highlights of the new program are as follows:
- Maximum loan-to-value (LTV) ratio of 97 percent and total LTV ratio of 105 percent.
- The mortgage must be a fixed-rate mortgage secured by a 1-unit property other than a manufactured home.
- Maximum debt payment-to-income ratio of 43 percent for manually underwritten mortgages.
FHA Insurance Reduced by .5%
Beyond the new down payment option from the FHA, President Obama announced yesterday that the FHA would be reducing their annual mortgage insurance premium from 1.35% to .85%. This change will result in a nine hundred dollar per year savings for the average new borrower.
And, with this additional money in their pocket, borrowers should now be able to afford more house for their money. This will most likely help first time home buyers in places like Loudoun, where the average home price hovers around $460K, thus placing a large upfront and monthly burden for a new homeowner.
Have Questions? We can help!
For many home buyers, financing a home can be a scary and daunting process. The good thing is that when you work with the Bush Realty Group, you get the benefit of a relationship with Mclean Mortgage and Champion Title, to make the finance and closing process an easy one.
If you have any questions regarding these changes, or are thinking about buying a new home and want to know what you would qualify for, contact Melissa at Mclean Mortgage or Nicole at Champion Title, and they will be happy to help you navigate these changes.