Do you hate the idea of making monthly payments to a landlord, but you don’t have the cash for a large down payment to purchase a home? Are you looking for your next home, but don’t have enough equity to put 20% down on your new place? Quicken Loans has a new loan option that could be just what you’re looking for.
Qualifying clients now have the ability to put as little as 1% down, while gaining 3% equity in the bargain.* That’s a pretty big deal. It means you could own a $150,000 home with as little as $1,500 down.
Every loan program has its own set of qualifications, and this one is no different. Here’s what you need to know.
This loan option can only be used to purchase a home. Refinances are not eligible. In addition, the home being purchased must be a single-unit primary residence. Second homes and investment properties aren’t allowed.
It’s worth noting that while you can use this to get a single-family home or condo, you cannot use the program to get a co-op. If the home you’re looking at still makes the cut, we can move on to your eligibility.
To start, this program is for clients with an average FICO score of 680 or higher.
In order to qualify for this program, you must earn less than the area median for your county. For the sake of convenient math, let’s say the income limit in your area is $100,000; you’d need to earn less than $100,000 annually to take advantage of this loan option.
You should also make sure your debt is in order. Your debt-to-income (DTI) ratio cannot exceed 45%. Let’s do a quick example:
Say I make $3,000 a month. The payment on my new house might total around $700 per month. The lease on my car is $300 and I pay off a credit card balance of around $200 each month. That brings my total monthly debts to $1,200, meaning I have a 40% DTI ratio ($1,200/$3,000).
The program comes with a cool online introduction to homeownership. It’s required for first-time home buyers, but since there’s a ton of helpful content in the course, we make it available to everyone at no cost.
Do you want to get started? You can fill out your application now. Any questions? Give us a call at (800) 251-9080 or let us know in the comments.
*For example, the payment on a $200,000, 30-year fixed-rate loan at 4.375% (5.179% APR) with a LTV of 97% is $998.58. Taxes and insurance not included. Rates shown valid on publication date of 3/02/2016. Restrictions may apply.
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.