Posted To: MND NewsWireFannie Mae’s 3% down payment HomeReady program was rolled out in 2016. HomeReady has numerous advantages over FHA loans (historically the most common “low down payment” option) and other conventional loans. We’ll compare them in this series. Today, let’s look at mortgage insurance costs: No upfront mortgage insurance premium: While both HomeReady and FHA have low down payments (3% for HomeReady, 3.5% for FHA), FHA loans add an upfront mortgage insurance premium (UFMIP) of 1.75% of the amount borrowed to buyers’ loan balances at closing. On a $200,000 purchase, that’s $3377. Think that’s not a significant cost? You don’t recoup it until you’ve made 12 payments! It also means that half your down payment goes to UFMIP costs, versus the…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Michael Ayoub, Author NMLS ID 6631