I was talking with a Lender friend of mine today and leaned about an old loan that has become new again. The program has been around for some time but before all the recent banking changes there were other products that were always more attractive. Now with the end of the down payment assistance loans this one is making a come back.
Here is what I've learned...
It is an FHA loan (so you must put down 3%) but the seller can contribute money that will go toward your interest on your monthly payments. This means you put down your 3% down payment and then with the seller's contribution you only make your principal (and taxes and insurance) payments up to the first 6 months you are in the house. This loan operates on the same concept as the down payment assistance programs, the seller is giving you a contribution, but since the government has said no more assistance with down payments, this one allows you to have assistance with your first few payments. If you have every looked closely at your mortgage payments, your payments over the first several years of the loan are all interest. Example...if your payment is $800 about $700 will be interest and $100 will be principal. With the seller paying your interest, your payment will only be $100 for that month. Cool, huh?!?! Now that I have thoroughly confused you - I've linked this to my friends site. He is much better at explaining all this than I am...in fact, he can even help you run the actual numbers, instead of pulling them out of the air like I just did ;-) And when you are ready to buy using this new loan (or any other)...I'm your girl!!! Give me a call and I'll be glad to email you some houses to start your search - after all now is the time to buy!!
FOR THE SELLER'S. This is a great incentive to offer on your home that you currently have for sale. It could be the tool that would help persuade a Buyer to purchase your home over another one. Basically you would need to look at your numbers on your home you have for sale and figure out how much you can offer and still come out where you need to be. Give me a call - I'd be glad to help with that.
Leigh Anne
