You can now buy a home with just 1% down
Two major lenders in the United States have started offering home loans that require only 1% down payments due to high interest rates. United Wholesale Mortgage and Rocket Mortgage will only offer these loans to lower and moderate-income borrowers who have a credit score of a minimum of 620. Additionally, buyers cannot earn more than 80% of their area median income. To qualify for a loan, individuals need to show they have a stable income and relatively low levels of debt. David Stevens, CEO of Mountain Lake Consulting, said “These low down payment options are really good ways to expand homeownership for families that otherwise may not be able to get a hold of the American dream.”
FAQs:
Why have the lenders started offering low down payment loans?
Lenders have started offering low down payment loans due to high interest rates.
Who qualifies for these loans?
These loans are only for low and moderate-income borrowers, who have a credit score of a minimum of 620. Additionally, they cannot earn more than 80% of their area median income. Buyers need to show they have a stable income and relatively low levels of debt.
What are the risks associated with low down payment loans?
Buyers who do not make larger down payments can find themselves owing more on their mortgages than their homes are worth.
It’s Now Possible to Purchase a Home with Only 1% Down Payment
Two major US lenders are now offering home loans that require a down payment of just 1% amid high interest rates. United Wholesale Mortgage, the nation’s biggest home mortgage lender, announced last month that it would offer loans with a minimum down payment of just 1% of the home’s sale price. This was followed by Rocket Mortgage, which recently launched a similar programme called One+. Both companies will provide an additional 2% of the home’s sale price, raising the borrower’s contribution to at least 3%. “It’s a really good way to expand homeownership for families that otherwise may not be able to get a hold of the American dream,” says David Stevens, CEO of Mountain Lake Consulting. However, the loans are income-restricted, and are only available to lower- and moderate-income borrowers with high enough credit scores, stable income and low enough debt. Buyers must also purchase single-family homes, and the United Wholesale Mortgage 1% down loan is only available through mortgage brokers.