Though I do nto deal with that area...Here is my take on Home path financing. I deal with a lot of buyers who purchase through fannie mae and use homepath. I think it is a great program.
it works similiar to an FHA loan. the down payemnt is minimal. In your case becuase you are buying it as an investment proerty; they will require 10% down payment. But, you do not pay any mortgage insurance. that is an insurance a bank charges you when the down payment is less than 20% to protect their interest in the house. Depending on the price of the hosue it can range form $40.00 to over a $100.00 a month on your monthly payment for a set period.
The second beneift is you do not need an appraisal. Fannie mae has had the house appraised and valued. they knwo the condition of the home and upon an agreeable price is goign to back the loan for the bank. Thus you save anywhere form $350.00 to $450.00 for an appraisal.
The third is you cna have a debt to income ratio of up to 50%. This means that your total current monthly debt obligations. (including your mortgage on the new house, current mortgage, any car payments and credit card debt ) cannot exceed 50% of your total gross monthly income.
The fourth criteria is you must have a credit score of at least 660. based on what you wrote you are fine with that.
the interest rate is slightly higher than a conventional mortgage but the payment will be less. You are not paying mortgage insurance and thus your paymet twill be smaller each month. Check with your local lender to see if they participate in the program. Most do, but not all.
- 660 minimum credit score
- No MI
- No appraisal
- Max LTV = 95%
- Max dept-to-income = 50%
Last item is key. HP prefers owner-occupied. Just wrapped an investment deal where seller financed w/ HP.
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors