July 22nd, 2011 3:36 PM by Bob Rutledge
Your money will help you more when it is in your pocket and not the pocket of your mortgage lender.
Most home buyers today whether they are first time home buyers or move up buyers are finding it difficult to keep their savings or coming up with the funds to close or for the down payment.
First time home buyers are representing a large portion of the home buyers in St. Charles, St. Louis, Missouri or anywhere throughout the country. Many studies have shown that there are 2 specific concerns to first time home buyers, one is credit qualification and the other is having enough money to purchase their next new home.
YOU CAN PURCHASE A NEW HOME TODAY WITH VERY LITTLE OUT OF POCKET EXPENSE!
There are 3 mortgage programs that help home buyers get into their new home with little to no money out of pocket, USDA/Rural Develop, VA and FHA. Of these programs VA and USDA allow for 100% financing and FHA has a minimum down payment requirement of 3.5%.
If you are a veteran and would like to learn more about VA financing you can learn more here at my web site. If you purchase outside an urban area in the state you may be qualified for 100% financing through USDA/Rural Development, if you would like to learn more or to see if the house you are interested in is eligible please go to my USDA/Rural Development web page.
FHA home loans are the number one most used mortgage program for low costs, small down payments and easier qualification. To learn more about this great loan program click through the FHA page of my web site, I think you will be happy that you did.
HOW MUCH WILL I SPEND TO BUY MY NEXT NEW HOME?
How much money you will spend out of pocket to purchase your next new home will depend on the loan program you are qualified for and the mortgage lender you are working with. I tell my clients, who are going minimum down payment, that they could have total out of pocket expenses anywhere from 3.5% to 10% of the sales price of the house. This could be a bit overwhelming to hear and if you are working with a lender who can't help you with closing cost or has access to the available down payment assistance programs this could then become an expensive proposition. But it doesn't have to be.
NO LENDER CLOSING COSTS NO APPRAISAL FEE!
Because I was working with so many first time home buyers and move up buyers who needed as much help as possible with the cost of purchasing a new home I decided to do what I could to help. So I came up with the 'No Lender Closing Costs No Appraisal Fee' mortgage program. That's right, for qualified home buyers I will not add to your closing costs by charging any lender closing costs and I will pay for the cost of your appraisal.
The average lender closing costs plus appraisal fee is nearly $1200, what would you do with this money if it were in your pocket instead of your lender? New Appliances, Carpeting, Window Treatments, House Accessories, Lawn Mower, what can you think of?
Of course like everything in the mortgage business that are qualifying guidelines but I am confident that most home buyers will qualify for the No Lender Closing Cost No Appraisal Fee program. Follow the link to learn more.
DOWN PAYMENT HELP!
If you are lucky enough to be able to utilize your VA mortgage benefit or USDA/Rural Development you don't need help with down payment, both of these home loan programs allow for zero down payment. If you are going to use an FHA mortgage for the financing of your new home you will need a minimum down payment of 3.5%. How would you like to get all or a portion of your down payment provided to you?
There are state and local programs in Missouri, St. Louis County, St. Charles County and Jefferson County that will provide you with all or a part of your down payment, in most instances at no cost to you and in many instances you will not have to pay it back.
The State of Missouri provides a 3 percent down payment assistance program to qualified home buyers, this program is usually referred to as MHDC, because it is provide by the Missouri Housing and Development Commission.
Then there are the many local county and municipality down payment assistance programs. Did you know that the Counties of St. Charles, St. Louis and Jefferson all provide down payment assistance? Also, that the cities of Florissant, Cottleville, Dardenne Prairie, St. Paul, Wentzville, St. Charles, Weldon Springs, Lake St. Louis, O'Fallon and St. Peters all have down payment assistance programs providing from $3,000 up to $10,000 in down payment help.
In St. Louis and St. Louis County there are programs referred to as Neighborhood Stabilization that provides newly renovated homes with up to $18,000 in down payment assistance.
COMBINE THE TWO TOGETHER AND SAVE YOUR MONEY!
How do you get the BIGEST BANK for YOUR BUCK? Combine a down payment assistance program with my No Lender Closing Cost No Appraisal Fee program and you may be able to get into a new home with as little as $500 invested in your new home purchase, possibly with zero out of pocket costs.
If you are a first time home buyer, if you have purchased a home before you already know, after you have purchased your new home you will purchase a lot of new items for the new home, if you don't have the money you will either have to wait or put the purchases on a credit card. Why wait, why incur the expense of a higher monthly credit card bill, if you have saved your money by having a lower closing costs, no down payment, or both then you can use the money you saved!
What Will This Savings Cost Me?
Of the home buyers who I have helped get their new home with the No Lender Closing Cost No Appraisal Fee program, a bit more than half found that the interest rate I provided was either below, the same or just a 1/8 percent more. The remainder of those I helped received an interest rate only 1/4 percent higher.
The difference of 1/8 of a percent between interest rates on a 30 year fixed rate mortgage on a loan amount of $125,000 equates to less than $10.00 per month.
The difference of 1/4 of a percent between interest rates on a 30 year fixed rate mortgage on a loan amount of $125,000 equates to less than $18.75 per month.
If you had the extra $1200 in your bank account you could dip into it for 110 to 59 months, respectively, to make that extra payment. If your interest rate is 1/8 to 1/4 percent higher but saved you $1100 it would take anywhere from 5 to 9 years to break even