Maybe you’re tired of writing rent checks each month, knowing that your hard-earned salary funds your landlord’s real estate investment. Or that living below a bunch of hard-partying college kids has worn thin, along with your apartment walls, which are more like Egyptian papyrus — and as old, too!
Yet buying your own home for the first time can feel impossible under the circumstances. You know the drill: Home ownership means coming up with a hefty down-payment. If you’re shelling out a large portion of your salary for rent, it’s discouraging to think about saving a considerable amount each month on top of your expenses to satisfy a loan officer. Plus, you’ve probably heard rumors that the days of no-money-down mortgages have gone the way of the dodo bird.
Except at Hanscom Federal Credit Union, where we’ve got a product for first-time homebuyers that lets you buy a home with no money down.
How does this program work?
“This is the first time we’re offering 100% financing,” said Susan Dunbar, Hanscom FCU’s Vice President of Mortgages. “A program with this kind of offer has been hard to find since 2008.”
You read that right. You can cure your rental headaches without having to bring 20% or 10% or even 3% of the purchase price to the table. We’re offering a 30-year 7/1 Adjustable Rate Mortgage with Zero (!) Down Payment!
In layman’s terms, this means for the first seven years of your loan, you’ll have an initial fixed interest rate. After seven years it’ll adjust no more than 1% each year with a cap of 5% over the life of the loan. “The appeal of a 7/1 ARM,” said Dunbar, “is that most first-time homeowners will either refinance or move within the first seven years, so chances are good they won’t need to worry about the rate change.”
Our mortgage product will let you purchase your primary residence—a single-family home or condo—with a loan amount of up to $510,400. You can purchase your home in any of the six New England states, or Virginia, Maryland, or Washington, DC.
What’s the catch?
Ok, you ask. What’s the catch? To qualify for this time-limited mortgage product, you’ll need to be a first-time homebuyer with excellent credit (minimum credit score of 720) and a debt-to-income ratio of 43%, no exceptions. You can be a first-time homebuyer if you have had no ownership in real estate during the three-year period before the purchase date of the property. Because this is a no-money-down mortgage product, it will require private mortgage insurance (PMI), which is an added expense you’ll need to pay monthly.
This product is open to Hanscom FCU members only, so you must open an account with us before closing. You’ll need to have two months of mortgage payments in reserve at closing; that’s principal, interest, taxes, and insurance. And lastly, if you’re thinking of asking Mom or Dad to pay those reserves, you’ll have to use your own saved funds to cover closing costs and the two months’ reserves. However, if you use our HomeAdvantage program, or can get the sellers to pay some of the closing costs (up to 3% of the loan amount), you can further reduce the amount you’ll have to bring to closing.
In a nutshell:
- At least one borrower must be a first-time homebuyer (has not owned a home in last 3 years)
- Applicants must have minimum median FICO credit score of 720
- Maximum debt-to-income ratio is 43%
- Must have 2 full months of housing payment in reserves or savings
- No non-occupant co-borrowers allowed on loan
- No gift funds allowed; closing costs and reserves must be your own
- Maximum loan amount is $510,400
- Location is specific to New England states, VA, MD, and DC
- Property Types allowed: Single Family Home or Condo (no multi-unit properties)
Are you ready to stop renting and start looking for a home you can call your own? Contact Hanscom FCU’s mortgage department today and learn more about this exciting limited-time product that’ll put you on the road to investing in your own future instead of your landlord’s.
Hanscom FCU has published a guide specifically for first-time homebuyers. In it, find an easy-to-understand explanation of the homebuying process so that you are prepared every step of the way to your new home.
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