There are great programs to help those who want to buy a home get a mortgage. Having trouble putting together the down payment? There are also programs available to assist with down payments. And if you are a veteran, physician, physician’s assistant, nurse practitioner, RN, pharmacist, veterinarian, dentist, dental surgeon, CPA or attorney there are even more options available with Professional Loan Programs. Below are some of the more popular mortgage products currently available.
Basic Federal Housing Administration (FHA) Loans
Not only are FHA loans great for first-time homebuyers they are also available for existing homeowners. Interest rates are typically the same as conventional loans, making FHA loans a very affordable option, especially for borrowers without the ability to make a large down payment. Another feature of FHA loans is that they are assumable. This means when a seller with an FHA loan sells the property, the loan and its financing terms (interest rate) can be transferred to the new buyer - a feature that will certainly make a property more intriguing in times of rising interest rates.
THE BENEFITS OF AN FHA LOAN
• As little as 3.5% down payment
• Down payment gift allowance
• No maximum income restrictions
• Flexible credit requirements
• Transferable interest rates
• FHA is more forgiven than a conventional loan on bankruptcy
• FHA is more forgiven than a conventional loan on foreclosure
• Loan to value up to 96.5%
• Higher debt to income ratios (over 50% with AUs approval) with compensating factors
• Credit scores down to 600
• Better interest rates than conventional if credit history is not the best
• gift funds accepted
• Down payment assistance accepted
BASIC LOAN AMOUNTS
• $472,030 - single-family home (Based on most St. Louis metro areas. Loan Amounts may vary by home location.)
• Borrowers must be occupants. Non-occupant co-borrowers allowed
• Typical qualifying ratios: Housing - 31%, Total Debt - 43%
• Permanent resident aliens
• Non-permanent resident aliens
95% Conventional Loan
The 95% Conventional Loan is the best alternative to FHA financing. In some cases, the ENTIRE 5% Down Payment is allowed to be a Gift.
• No Income Limits
• No Higher Rate
• No Homeownership Course
• Mortgage Insurance may drop at 78% Loan to Value (LTV)
Gift funds are allowed for entire down payment if:
• DTI (Debt to Income) less than 50%
3% Down Loan
3% down purchase loan is part of an ongoing effort to expand access to credit for creditworthy borrowers and support sustainable homeownership.
- Standard Purchase Transactions
- If one of the borrowers is a first-time home buyer (FTHB/Not owned a home in the past three years), and their income is below 80% AMI, there is an opportunity for reduced rates and mortgage insurance
- All loans must be fixed rate
- 1 unit principal residence
- 35% mortgage insurance
- Does not cover manufactured homes
USDA 100% Financing Loan
Those looking to occupy residence in some areas may qualify for a USDA Loan. In many cases the property only has to be located outside a metropolitan area. Along with location, a few other items for eligibility criteria include household income, household dependents and credit history. These guidelines are detailed and may differ from county to county.
- 100% financing available
- Up to 102% financing (with funding fee)
- No maximum seller concessions
- Gifts funds allowed for purchase loans
- Primary residence only
- Closing costs may be financed up to 100% of appraised value
- No county loan limits
- New and existing homes are eligible
- No in-ground pools
- No manufactured homes
- Minimum credit score of 680
- New funding fee 0.35% as of 9/1/2023
100% Financing Loans St. Louis Metro AreaHousehold Income Limits (As of 9/1/2023)1-4 Persons : $115,0005-8 Persons: $152,000
Bridge financing is for prospective borrowers who want to use the lendable equity in their existing residence as a down payment for the purchase of another property. A bridge loan program first encompasses a lien on the borrower’s existing primary residence to be sold. Then a separate, permanent loan will be made on the property to be purchased.
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Loan information provided by Jeff Griege, Vice President at Paramount Bank. All loans are subject to updated guidelines by lenders and qualification for approval. Check with your preferred lender for their latest mortgage program guidelines and qualifications.
For more information on types of mortgage products, obtaining a mortgage, receiving down payment assistance or to be put in touch with a qualified reputable lender, contact The Boehmer Team. We can recommend experienced mortgage loan providers in the St. Louis or St. Charles County areas of Missouri.