03/04/2024
Let's dive into the hot topic of the mortgage industry: **Down Payment Assistance**!
Down Payment Assistance involves funds provided via a grant, forgivable second lien, or repayable second lien. It can be a helpful tool for those who haven't saved enough to cover the down payment and closing costs. However, borrowers must be mindful of important requirements before considering this option.
- Minimum 600 FICO score
- Zero accounts reporting 30+ days late in the last 12 months
- No open disputed derogatory accounts
- Total expense ratio not to exceed 45%
Clients opting for down payment assistance should note that their DTI ratio being restricted to 45% means they won't be able to borrow the maximum loan amount available. For instance, if a borrower qualifies for a maximum purchase price of $250,000 with a 3.5% down payment for FHA, using down payment assistance could decrease their approval to around $230,000, creating a $20,000 difference. This difference can significantly impact the homes they can afford.
Borrowers should also consider that with assistance, they might settle for a higher interest rate due to the amount given. However, making on-time payments for at least 12 months could enable them to refinance for a lower rate if the economy allows.
For questions about down payment assistance or to see if you qualify, apply today at www.dasiageemortgage.com or message to schedule a consultation. Take the first step in investing in yourself and owning your own home!
