If you are buying a new home in St. Louis, St. Charles or anywhere in the area or even if you are considering buying a new home in the St. Louis area you can't help but notice the number of available foreclosed homes that are on the market. One in three homes sold in today's housing market is a 'distressed' home and foreclosures make up a large portion of that market.
This is especially true if you are looking for those ever mentioned bargain homes, the homes that are priced well below market value. With so many distressed homes on the market this is a sound buyer strategy, purchase a home that is priced below market value and walk into a great equity situation. Why buy a home that is priced at market value when the market continues to have home prices drop month after month for the past couple years. A distressed home comes with built in equity that can absorb much of the loss in equity that will come down the road.
If you are a home buyer in the St. Charles and St. Louis area and you are looking for bargain homes you have by now seen homes with the designation of HomePath and/or HomePath Renovation. Have you seen these already and wondered what this meant? What is HomePath and/or HomePath Renovation?
For many home buyers, obtaining a mortgage in a lending environment that changed virtually overnight from everyone gets a loan to a market of much tighter lending policies has become an issue of getting a new home. Even for those who have good credit scores mortgage lenders are now requiring home buyers to place larger down payments, obtain excessive mortgage insurance (PMI), and cover your own closing costs.
Fannie Mae, one of the two groups referred to as conventional mortgages, offers a program called HomePath Mortgage Financing that is structured to help in purchasing a home without the burden of huge upfront costs. For those home buyers that qualify a HomePath mortgage offers many benefits that cannot be found in other mortgage programs.
The HomePath program was designed to support the sale of foreclosed homes owned by Fannie Mae. A HomePath mortgage can only be used to purchase a Fannie Mae foreclosure with either the HomePath or HomePath Renovation designation.
The HomePath mortgage is more a traditional mortgage that we are all use to hearing about where the HomePath Renovation mortgage allows for light renovations to a home. The cost of the renovation project for a HomePath Renovation mortgage is rolled into your new mortgage and provided after the closing of your purchase. For both types, the overall qualifications of these loans are much more flexible:
LOWER CREDIT SCORES: even those with less than perfect credit may qualify for a HomePath mortgage. A lower credit score than average does require at least a 20% down payment, but this situation can often be increased through the support of the seller or through grant/down payment assistance programs.
LOWER DOWN PAYMENT: a HomePath mortgage requires only a minimum 3% down payment that can be generated from a wide variety of sources. The down payment can be funded directly from the home buyer, through a gift, a grant, down payment assistance programs, an employer, or through the many local and state government entities that help with home ownership.
NO MORTGAGE INSURANCE (PMI): with a HomePath mortgage, the no mortgage insurance provision applies to down payments as low as 3%!
NO APPRAISAL COST: as opposed to all mortgages, HomePath loans requires to appraisal to determine home value, the HomePath Renovation loan does require an appraisal though. Instead, the loan will be based on the sales price a home buyer negotiates with the seller.
Available to both owner occupant and investor home buyers!
Okay, so you think you have found 'the perfect home' and it is a Fannie Mae property! Well, be prepared to act quickly because, while every market is a bit different, the Fannie Mae properties seem to receive multiple offers early when the house is only available to owner occupant buyers and then later to investors who tend to snatch up solid foreclosure homes very quickly. Talk with your real estate professional about how to submit an offer and the timing of your offer. Your real estate professional will work with you to prepare an offer and evaluate many factors before making your offer.
If you are going to make an offer on a HomePath or HomePath Renovation home be prepared first by getting pre-qualified with a mortgage lender that is certified to offer HomePath mortgages. In the St. Louis and St. Charles area there aren't many lenders qualified to provide you with a HomePath mortgage and even fewer who offer the HomePath Renovation mortgage.
If you have any questions regarding HomePath or HomePath Renovation mortgages or would like a copy of "The Buyer's Guide For a Fannie Mae Owned Home" please feel free to contact me. My name is Bob Rutledge I am a HomePath and HomePath Renovation Mortgage Specialist you can contact me either by calling me at 314-628-2218 or email me at firstname.lastname@example.org.
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