Financing in Germantown>Question Details

Charmed077, Home Buyer in Germantown, MD

Anyone have experience or information on BB&T's CHIP mortgage program?

Asked by Charmed077, Germantown, MD Wed Feb 2, 2011

I just recently found out about BB&T's CHIP mortgage program and it sounds almost too good to be true. A 0% to 3% down payment, low closing costs, and no PMI? What's the catch? I was dead set on an FHA loan, but after hearing about this, it may be a better option. I'd appreciate any information you can offer. Thanks!

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8
Cindy Scott’s answer
I am a realtor and just closed on a house where my buyer got a CHIP mortgage through BB&T. He was prepared to have to put down 3% and it turned out to be 1%, low closing costs and no PMI! He was thrilled because he had extra money in his pocket to do repairs to the house and his payment was lower than he expected. I would highly recommend this to my buyers!
0 votes Thank Flag Link Fri Mar 9, 2012
CHIP is a great program on paper. I liked it better then FHA for some obvious reasons, like absence of PMI and low down payment. However, I can't say that BB&T is a good bank. In fact, I can say that my experience with them was horrible. Their loan officer was incompetent, negligent and unresponsive. They declined my loan application 2 days before closing date because loan officer forgot to provide some important stuff to underwriting. I lost the deal, I lost appraisal fee, inspection fee and wasted two months. So, to me, CHIP may be good, but I would not recommend to any of my friends to deal with BB&T.
1 vote Thank Flag Link Thu May 15, 2014
I am currently in the closing period of this BBT Chip Loan. The catch so far has been a higher interest rate. FHA loan interest rate was 3.5% with a 3% down payment and a monthly PMI. With the BBT Chip loan the interest rate I got was 4.5% with a 0% down payment and no monthly PMI. The house I am buying is 152,000 and the owner is paying 3% of the homes value towards closing cost.

It was a cheaper monthly mortgage to go with the BBT CHIP program than with the FHA loan. So that is why I chose it. With FHA they wanted an extra 148 dollars a month for the PMI. Now, the PMI does go away once you have 22% equity in the home, but you have to pay the PMI for a minimum of 5 years.

FHA loan is more out of pocket cost than the BBT CHIP. On 152,000 i would have had to come up with 3% down = $4,560 for downpayment, $1,000 deposit to realtor, $450 for appraisal, and $320 for inspection with a sum of $6,330 for FHA.

With BBT CHIP I paid 0% down, $1,000 deposit to realtor, $450 for appraisal, and $320 for inspection with a sum of $1,770.

My Good Faith Estimate on the closing cost would bring me to a credit of $330, so the 3% from the seller plus my $1,000 deposit will cover the closing cost unless there are extra fee's that have not been presented to me.

The CHIP loan program will finance anywhere from 97%-100% for the home. 97% if the home is in a declining market area and 100% if the home is in a stable market area.

I applied for the BBT Chip loan on March 4th, and the required documents were: Homebuyers education (which is free on the VHDA website), my last 2 paystubs, and my 2012 W-2 information, and a written letter from my parents that I do not pay rent. I bank with BBT so they have access to my bank account information, and of course your SSN for credit look up.

Just my two cents on my housing situation. I graduated college 6 months ago, and had a steady job all through college and picked up another job after college in what I went to school to do. I was worried about the housing market and having money for a down payment and such after school, and with the BBT Chip loan, I have only had minor stress headaches instead of migraines. Good choice for families without a lot of money to put down on a house or for first time home buyers like myself.
1 vote Thank Flag Link Fri Mar 22, 2013
I am a realtor and my client is scheduled to close with her CHIP program instead of FHA due to it being a better program for her. The program is better due to she is Not a first time home buyer, not PMI, fixed rate and 100% financing. This is in the Charlotte, NC area.

So therefore, if I was looking to purchase a home today, I would go with the CHIP program.

Phyliss Twitty
0 votes Thank Flag Link Wed Aug 12, 2015
hello. I used Jonathan Alexander at BB&T and did a CHIP loan. the only negative is your interest rate is a tad higher. It is true and it is a good loan. i pay no mortgage insurance at all! and my mortgage is $150 cheaper than if i had used a different program.
Cinda Cruz
0 votes Thank Flag Link Thu Jun 27, 2013
The interest rates on these loans seem to be slightly higher than on FHA loans, especially if you have a good credit score. I find that to be the only "catch". You can get rid of PMI by paying down your principal, or making improvements, or generally having your home appreciate in value so that your Loan to Value ratio decreases. I suppose you can refinance eventually to get a lower interest rate, but seems that the PMI goes away after a while, while the interest rate will not, unless you get a different loan.
0 votes Thank Flag Link Sat Feb 18, 2012
I currently have a client using this loan type. Please feel free to email me any question or lender recommendations.

Thanks
Melissa
mbarkalow@comcast.net
0 votes Thank Flag Link Wed Feb 2, 2011
The BB& T Chip Mortgage program is a good loan and there's no catch just the rates tends to be a little higher that the standard conventional loan rate for the same terms. I would suggest you looking at the HSBC CommunityWorks program with offers 97% financing and a discounted mortgage rate for First Time Home Buyers in Montgomery County. Also, Private Mortgage Insurance may be tax deductible but please check with your tax advisor. You should at least compare all programs prior to making your final decision.

Sincerely,
Noel A Shepherd
202-642-4305
0 votes Thank Flag Link Wed Feb 2, 2011
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