Buying a home is stressful. There’s a lot to remember and important things to consider, but it can be easier if you educate yourself and stay informed.
A top concern for those considering buying a home is coming up with a down payment. While there are low down payment programs out there, here are a couple other things to consider.
Mortgage insurance lowers the lender’s risk of providing the loan to you by insuring the lender. Borrowers making a down payment of less than 20% will typically need to pay for mortgage insurance. It’ll increase your payments or certain costs during the process.
If you get a standard mortgage from a financial institution, they’ll most likely have a list of private companies you can use. This is called Private Mortgage Insurance or PMI. Under certain circumstances, you can cancel it after a period of time.
A piggyback mortgage is the term for when a borrower uses two loans at the same time for the same home. It allows borrowers with a low down payment amount to take out additional money to qualify for the first mortgage and avoid mortgage insurance.
Here’s an example breakdown of what this could look like:
- First mortgage: 80% of the home’s value
- Second mortgage: 10% of the home’s value
- Down payment: 10%
In order to qualify for this, you’ll need to meet certain credit score requirements and debt-to-income ratios.
Want to learn more about A+FCU Mortgage options? Visit one of the branches below on a Mortgage Awareness Day to have all your questions answered by an A+FCU Mortgage representative.
|San Marcos||Friday, January 25||3 pm – 5 pm|
|Pflugerville||Friday, February 1||3 pm – 5 pm|
|Main||Friday, February 8||11 am – 1 pm|
|Cedar Park||Friday, February 15||3 pm – 5 pm|
|Buda||Tuesday, February 19||11 am – 1 pm|
|Georgetown||Friday, March 1||11 am – 1 pm|
|Southwest||Friday, March 8||11 am – 1 pm|
|North||Friday, March 15||3 pm – 5 pm|
|Bee Cave||Tuesday, March 19||12 pm – 2 pm|
|Trails||Friday, March 29||11 am – 1 pm|