Understanding HomePath LoansYou might have heard of the latest trend in mortgage loans on home foreclosures: The HomePath Loan. The rumor behind it is that it can make buying a foreclosure easier, getting rid of some of the typical roadblocks that come with buying a foreclosure property. The HomePath Loan doesn’t require a potential buyer to get a mortgage insurance, a property inspection or an appraisal. It’s also a loan that’s offered exclusively to homebuyers who are buying Fannie Mae properties.
MSN online explains that Fannie Mae doesn’t directly lend to homebuyers. They just set up guidelines for lenders to follow if these lenders are looking to sell the loans to Fannie Mae after they are originated. With a HomePath Loan, Fannie Mae lets the lenders finance properties owned by Fannie Mae with 3% down from the homebuyers who are looking to live in those homes and 10% down for those that are looking to act as investors. HomePath also offers renovation loans for homebuyers buying properties that need repairs. The financing goes up to 97% of the home’s expected worth after the renovations. Most lenders are looking for a minimum credit score of 660 for those putting 3% down.
Potential homebuyers have the choice of 80,000 homes listed on the HomePath website, to which new properties are always added. Only about 50 lenders nationwide are approved to offer HomePath financing. One advantage to buying with HomePath is that homebuyers are not competing against investors in the first 15 days of the listing. The property doesn’t have to be appraised either, unless it’s the case of the renovations. Inspection isn’t needed either, however it’s always a good idea for homebuyers. Mortgage insurance isn’t required like it is conventional loans that require it unless there’s a 20% down payment.
The disadvantage to HomePath Loans is the higher interest rates. They are typically a quarter to half a percentage higher than rates for conventional loans. However, some homebuyers rather lower the interest rate by paying points.
If you’re in the market to buy a foreclosure, it might be a good idea for you to look into buying a foreclosure. When you find that perfect home for you and your family, make sure to call the San Antonio local movers for help with professional moving services. Our local San Antonio moving specialists will quilt pad wrap your delicate furniture and safely move your personal belongings. All My Sons of San Antonio is part of a huge network of reputable movers across the U.S., so you have nothing to worry about.