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  • 1% down mortgages? Beware the small print.

    Minneapolis, MN: Like everything that sounds to too good to be true, be careful of what they don’t tell you!

    A big internet lender just announced their new 1% down home loan program. The program requires a buyer whose income is equal to or less than 80% of the area median income, to make a 1% down payment on a single-family home, with the lender covering the remaining 2%.1% down mortgage

    Sounds great right? Well, not so fast.

    This program is just a standard first time home buyer 3% down mortgage loan. As nothing is free, how does the lender achieve this great sounding option?

    In order “for the lender” to cover the cost of your missing 2% of the down payment, they MUST dramatically increase the loans interest rate to make up over time with a higher interest rates and payments to make up for the money they cover for you today.

    They are also talking about “no mortgage insurance” on this new offering. Again, this is nothing special, as every lender can do it too.  But guess what.  It also isn’t ‘free’ to you. You have to buy out of the mortgage insurance. This is generally done by again, raising the loans interest rate.

    This generally makes this 1% program disgustingly expensive compared to other options.

    So the program is real, but expensive, and not the best option for most people, especially when Cambria Mortgage – The Joe Metzler Team offers a much better program for first time home buyers in Minnesota. With this program, you need just a minimum of $1,000 of your own money, you get down payment assistance to cover the rest of your down payment, AND you still get a very competitive interest rates.

    Learn more about this Minnesota first time home buyer program here, and don’t just assume this is a great program for you.  be sure to sit down with a very well qualified and experienced Loan officer who will go over all of your options to make sure you are getting the BEST loan for you and your family.

    NMLS 274132. Equal Housing Lender. Rates subject to change. but as of the date of this posting, 7.127% APR.

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