3% Low Down Payment Mortgage Options

  • June 22, 2021
  •   •  
  • 4 min. read time
3% Low Down Payment Mortgage Options

First things first, you might be surprised to learn who qualifies as a first-time homebuyer in Oakbrook Terrace, IL. Even more surprising, 3% down-payment mortgage options are available for homebuyers who aren’t first-time homebuyers. There are a few limitations, so let’s see which options might be a good fit.

Related: Find out if you’re eligible as a first-time homebuyer in Oakbrook Terrace, IL.

Low Down Payment Mortgage Options in Oakbrook Terrace for First-Time Homebuyers and Repeat Homebuyers

Did you know there are down payment options that require as little as zero percent down on your next home? Find out more about USDA Loans and VA Loans and how you could qualify for a no-down-payment mortgage.

If you’re looking for low-down-payment mortgage options in Oakbrook Terrace, keep reading.

How to Qualify for 3% Down on Your Next Mortgage in 2021

You’ve probably heard that most new home loans require a down payment between 5%-20% to get a good mortgage. The higher the down payment, the lower the mortgage rate. But this isn’t always the case.

Low-down payment mortgage options only require 3% down and are designed to help more people in Oakbrook Terrace, IL, become homeowners.

A quick list of qualifiers for a 3% down payment option on your next mortgage:

  • A minimum credit score of at least 620
  • Stable employment and regular income
  • No recent foreclosures or bankruptcies
  • Primary residence (live at your new home full-time)
  • Gift funds can be used for the down payment and closing costs
  • Your mortgage must meet conforming loan limits
  • 2021 Conforming limits: $548k in most areas, $822k in high-cost areas

Low Down Payment Mortgage Option #1: HomeReady Mortgage Loan by Fannie Mae

The Fannie Mae HomeReady Mortgage is a mortgage program designed to meet the specific needs of lower-income homebuyers. The income limit set by Fannie Mae is 80% of the local median income in Oakbrook Terrace, IL. So if you’re shopping for a home in Oakbrook Terrace and your income is below 80% of the median income, this is a great mortgage option.

The Fannie Mae Home Ready Mortgage has some great benefits to consider for your home loan mortgage.

One of the biggest advantages of the HomeReady Mortgage is the ability to count multiple sources of income toward your loan application. For example, you can include income from renters or relatives living with you when applying for a Fannie Mae Home Ready home loan.

A few benefits and highlights:

  • Gifted funds can be used for up to 100% of your down payment
  • Gifted funds can be used for your closing costs
  • Down Payment Assistance (DPA) can be used for closing costs
  • You can count rental income on your loan application
  • You can count income from relatives or other people living with you (if they’ve lived with you for at least one year).

The Fannie Mae HomeReady home loan can also be used to buy a multi-unit property in Oakbrook Terrace (up to 4 units) as long as at least one of the units is your primary residence.

Related: Find how much you can afford using this free mortgage calculator

Low Down Payment Mortgage Option #2: HomePossible Mortgage by Freddie Mac

The Freddie Mac HomePossible Mortgage is similar to the Fannie Mae HomeReady mortgage program and can help lower-income homebuyers in Oakbrook Terrace qualify for a home loan. The income limit set by Freddie Mac is 80% of the median income for Oakbrook Terrace, IL.

One key difference with the Freddie Mac HomePossible loan is that you’re only allowed to count your own income and rental income on your home loan application. The HomePossible mortgage does not include income from other relatives or occupants as qualifying income (unless they are renters).

A few benefits and highlights:

  • Gifted funds can be used for up to 100% of your down payment
  • Gifted funds can be used for your closing costs
  • Down Payment Assistance (DPA) can be used for closing costs
  • You can count rental income on your loan application

The Freddie Mac Home Possible home loan can also be used to buy a multi-unit property (up to 4 units) as long as at least one of the units is your primary residence.

Low Down Payment Mortgage Option #3: Conventional 97 Mortgage Option for Higher-Income Buyers

The conventional 97 mortgage program is a great option for homebuyers in Oakbrook Terrace who have higher income and higher credit ratings but want to qualify for a 3% down payment.

It’s more flexible in some ways since there are no income restrictions, but it has tighter restrictions in other areas. For example, the Conventional 97 mortgage is not available for investment properties or multi-unit properties.

A few benefits and highlights:

  • Keep growing your savings instead of making a big down payment
  • Invest elsewhere to build wealth instead of making a big down payment
  • Ability to cancel PMI (private mortgage insurance) faster
  • Ability to purchase a more expensive home
  • No limitations on areas or neighborhoods
  • No limitations or caps on income

Taking Action

If you’re looking for a 3% down payment mortgage option near Oakbrook Terrace, the Claudio Prunotto Team offers a wide variety of custom loan options. Working with an experienced mortgage broker who understands your situation will make a big difference! If you want to save money on your next mortgage and start building real estate equity in 2021, now is a great time to start. We can help.

 

equal housing opportunityNMLS CONSUMER ACCESS LINK: NMLS #1850

© 2021 American Pacific Mortgage Corporation. For informational purposes only. No guarantee of accuracy is expressed or implied. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions may apply. Equal Housing Opportunity.

Licensed by the Dept. of Business Oversight under the CRMLA.

Licensed as Preferred Rate in AL, CA, CO, FL, GA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MS, NC, OR, TN, TX, VA, WA, and WI. Preferred Rate operates under American Pacific Mortgage in AZ and NV. AZ Corp BK 0906702. CA DRE #01215943. Regulated by the Colorado Division of Real Estate. Georgia Residential Mortgage Licensee. NV MB 2941/164. Licensed under the Oregon Consumer Finance Act.

Licensed by the Illinois Department of Financial & Professional Regulation, Residential Mortgage License # MB.6761304 | James R. Thompson Center | IDPR – Residential Mortgage Banking | 100 West Randolph St, 9th Floor | Chicago, Illinois 60601 | (844-)768-1713

Licensed by the Department of Financial & Professional Regulation, Residential Mortgage License # MB.6761304

The Department of Financial and Professional Regulation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department." (Source: P.A. 101-657, eff. 3-23-21.)

CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550. THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.”