Montgomery County, Maryland
no mortgage insurance | no money down
Yes, I had to do a double-take when I first found this program.
Back in the hay-day... around '05, we saw plenty of little or no money down financing programs available to buy a home. Back then it was popular to break your financing into 2 loans to avoid mortgage insurance (MI). MI is charged by the Lender when a borrower puts down less than 20% for their down payment.
This 80/20 loan would provide 80% financing at one rate and then the remaining 20% at a much higher rate. Even with the higher rate, the overall total payment would still be significantly lower than other programs at the time offering 1 loan BUT with mortgage insurance.
Fast forward to present day... the whole lending environment has changed completely. Lenders don't have the strong appreciation in home values to make up for the risk they're taking with lesser downpayment options. Not to mention the real estate bubble that burst, that burned so many Lenders who took these risks.
100% financing went away unless you are a Veteran (VA loan) OR your home is in an agricultural area and the property is eligible for a USDA loan. MAYBE some north-western parts of the county are eligible out in Poolesville or Dickerson. These are both great loans, but what if you want to buy in Silver Spring and you're not military??
Most people know about FHA as the next best option for your lowest down payment mortgage option. FHA allows you to put down as little as 3.5%. FHA mortgage insurance (MIP) will be added to your monthly payment. The amount just increased to 1.25%. If your loan is $250,000 then your monthly MIP will be 250,000 x .0125= $3,125 / 12= $261/month added to your monthly payment.
100% financing | Montgomery County
100% financing is available in Montgomery County, Maryland. I am not referring to a VA loan for military and I am not referring to USDA financing which requires home to be in a rural area.
2 main requirements: good credit & income is under $90,700
FHA requires 3.5% AND will add hundreds in MI to your payment.
- $0 down payment
- $0 mortgage insurance
- $0 closing costs or low closing costs is possible if we pursue a home where the Seller is willing to give a credit to cover the closing costs. This is not uncommon & has worked out with clients where their total out of pocket for everything was less than $2,000. Everything.
Keep in mind they still had to have some savings and qualify for their loan as a solid borrower. My point is that if it is your goal, we can work up your home purchase to get you in with no down payment & the majority of all your closing costs covered. On a $250,000 purchase in Montgomery County your closing costs, escrows, and prepaid items can total as much as $8,000 or more.
FHA scenario- good credit, but is more flexible to allow marginal buyers
- if condo, must be an approved building. Many are not fha approved.
- $8,750 down payment (on $250,000 sales price)
- $261/month mortgage insurance
- $4,375 upfront FHA mortgage insurance, financed into/added to loan
- - $0 or low closing costs (same as above scenarios). We can pursue a seller to cover most of these closing costs, we can target your total out-of-pocket needed as close to the $8,750 down payment as possible.
-Also, as of January 1st 2012, mortgage insurance is no longer tax deductible.
Contact me for more details. I would love the opportunity to help you buy your next home.
301-257-1270 call / text