Finally first time homebuyers with credit over 720 are being rewarded! With 5% down we have the option to finance mortgage insurance instead of paying it on a monthly basis and waiting to have 20% equity in order to have it removed. For example on $350,000 with 5% down and a 720 credit score you would look at a monthly payment of principal and interest of $1,759.62 (at a 4.875% interest rate with no points). On top of this would be monthly mortgage insurance of $157.94. The principle and interest payment along with the mortgage insurance would be $1,917.56 (taxes and insurance would also be added to this but are property specific). If you chose to look at the 5% down loan program with financed mortgage insurance a one time up front fee of $6,716.50 would be added to your loan amount alleviating the monthly mortgage insurance payment. The monthly principal and interest payment would then be $1,795 WITHOUT a mortgage insurance payment. This is a monthly savings of $122! You take advantage of the same interest rate! The more you put down the less the mortgage insurance is. This is a great option that we are having our homebuyers look at in order to give them more buying power and a lower monthly payment.
For More information on this program contact:
Alisa Carlson with Stearns Lending