Guest Blogger: David A. Simon, MBA - Vice-President AJM Mortgage, Inc.
BELIEVE IT OR NOT, YOU CAN STILL BUY A HOME WITH NO MONEY OUT OF POCKET !!
This is the best kept secret. To qualify for a loan with Fannie Mae, Freddie Mac, FHA, and/or local banks, you will need to have at least 3% down. 3% down may or may not be a problem for you. But when you also have to come up with closing costs, that may break your bank.
Consider the typical $150,000 home in Canonsburg that has property taxes of $2500. Regardless of where you would go for the loan, closing costs would be in the neighborhood of $10,000. That would mean you would need to come up with an approximate total of $14,500 for the closing. Now, one may argue that you can ask the seller to pay 6% towards your closing costs with an FHA loan. That is true but assuming they would accept the offer you would still need a total of $5,500 for closing.
Consider the alternative, the USDA loan. With this government program, you get the same 30 year fixed rate that you would get with an FHA loan, however you don't need the downpayment as they will finance 100% of the purchase price. Additionally, you may be able to finance all of your closing costs. Thus $0 money down. Another feature with this program is that, unlike FHA, there is NO monthly private mortgage insurance which means that you will get a lower monthly payment than the comparable FHA loan. You don't need to have perfect credit to get this loan either. Lastly, if the home needs some repairs you may be able to borrow that money as well.
If you are considering the purchase of a home in the next year but don't have any money set aside for a downpayment - this program may be just perfect for you!
Also, with the passing of the new first time homebuyer tax credit, you can get up to $7500 back when you file your tax returns next year. You don't need to be a first time homebuyer to qualify for the USDA financing but you do to get the tax credit.
Please call or email me with any questions.
David A. Simon, MBA
Vice President
AJM Mortgage, Inc.
1195 Washington Pike
Suite 330
Bridgeville, PA 15017
412-257-6005 phone
1-866-296-2323 toll free
412-257-6009 fax
412-916-3543 cell
WWW.AJMmortgage.net "Great Rates. Impeccable Service"