The minimum down payment to us a Fannie Mae Conventional mortgage loan to purchase a home, has been at 5% for the past year.
However, Fannie Mae has now decided to lower the minimum down payment to 3% of the purchase, which is actually in line with their previous minimum down payment.
The move is only a 2% reduction in down payment, but if a home buyer is unable to have a full 5% down payment, the new Fannie Mae 3% down payment program could save them some costs in the short and long term, compared to an FHA loan which has a minimum 3.5% down payment.
Conventional and FHA mortgages with smaller down payments, both have annual mortgage insurance premiums, which are paid as part of a home loan’s monthly payment. However, those annual premiums are generally higher on FHA loans and FHA loans also include an upfront mortgage insurance premium, which Conventional loans do not.
The second part of this story though is yet to be written as it appears that many larger banks have not been quick to offer to the new 3% down payment program right away. In the coming months, we may see this offered by more banks, but for the time being, only a limited amount of lenders have decided to follow suit and allow for a 3% down payment on a conventional home loan for the purchase of a home.
As always, as more information becomes available, we will present that information as well.
For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
Strategic Mortgage, LLC - AZ BK#0909514 - NMLS#158804 - Equal Housing Lender – Vasilios Bill Kamboukos Jr – NMLS#160440
Comments(1)