Ok so you’ve got all your ducks in a row and you are almost ready to buy a home but there’s one big hurdle left to overcome – the down payment.
For many potential first time home buyers, saving up for a minimum down payment of 3% or 5%, let alone 20% down, can seem like an impossible task. But today, don’t worry because with Andes Mortgage’s 1% down payment options, you can make your dream of homeownership a reality.
Why is a 1% Down Payment Option Important for First-Time Homebuyers
But before we dive into the details of these 1% down payment options, let’s take a quick look at why they’re such game changers.
Traditionally, the down payment has been a major roadblock on the path to homeownership. It’s often the biggest, heaviest stone that prospective buyers have to push uphill. For first-time homebuyers, the minimum down payment has been 3% for quite some time now. However, even at 3%, if you were buying a $400,000 home, your down payment would need to be $12,000. A sum that is pretty big for many families.
But with a 1% down payment option, that sum becomes more achievable. Now, buying a home becomes a lot less “mission impossible” and a lot more “mission probable”.
Features of the 1% Down Payment Program
With Andes Mortgage’s 1% down payment option, you only need to put down 1% of the home’s purchase price as your down payment. This means that for that same $400,000 home, your down payment would be only $4,000. That’s a significant difference and can make all the difference in being able to afford your dream home.
Thanks to our partners in our lending network, the other 2% part of the down payment is a grant that does not have to be repaid. That’s right, you don’t need to worry about coming up with an extra 2% of the purchase price. This exclusive 2% grant is only available through Andes Mortgage and can save you thousands of dollars.
The best part? Our 1% down payment option is available to qualified homebuyers In Georgia and Florida for now where we are licensed. But don’t worry, we are working on expanding our program to other states soon. So stay tuned!
How to qualify for the 1% down Payment Program
The 1% down payment option is available to those who meet certain eligibility requirements. Let’s break down the most important ones:
Be a first-time homebuyer: Currently, this program is only available for first-time homebuyers or those who have not owned a home in at least the last 4 years.
Minimum 680 credit score
This is the minimum credit score required for the 1% down payment program. If your credit score is lower, don’t worry, we have other programs available that might suit your needs.
Income restrictions
As with any mortgage loan, you need to meet certain income requirements in order to qualify for a home loan. The maximum income to qualify is no more than 80% of the Area Median Income “AMI”. For example, if you are buying a home in Atlanta, Fulton County, Georgia, the area’s median income is $102,900, thus the maximum income you can make to qualify is $82,320. For other areas, you can use Fannie Mae’s Area Median Income Tool.
Debt to income ratio
A debt-to-income ratio of no more than 43%, This is to ensure that you have the financial capability of repaying your mortgage loan.
First-Time Homebuyer course: As a first-time homebuyer, we require you to take an online course that will educate you on the home buying process and provide valuable information to help you make informed decisions.
Additional Tips for First-Time Homebuyers
While our 1% down payment option can certainly make homeownership more attainable, there are still other expenses and factors to consider when buying a home. Here are a few tips to keep in mind as you navigate the home buying process:
- Budget for closing costs: In addition to the down payment, there are other fees and expenses that come with purchasing a home, such as appraisal fees, title insurance, and attorney fees. Be sure to budget for these costs on top of your down payment.
- Consider all expenses: Owning a home comes with additional expenses, such as property taxes, homeowner’s insurance, and maintenance costs. Make sure to factor these into your budget when deciding on a home.
- Get pre-approved: Before you start house hunting, get pre-approved for a mortgage loan so you know exactly how much you can afford. This will also make the buying process smoother and show sellers that you are a serious buyer.
- Work with a trusted real estate agent: A good real estate agent can make all the difference in finding your dream home and navigating the buying process. They can also help negotiate prices and terms on your behalf.
- Be patient: Buying a home is a big decision, so don’t rush into anything. Take your time to find the right home and make sure you are financially prepared for the responsibilities of homeownership.
How to apply for the 1% down payment program
Applying for the 1% Down Payment Option with Andes Mortgage is a simple, straightforward process:
- Initial Inquiry: Reach out to us via phone, email, or through our website’s contact form. Our friendly and experienced loan officers are ready to answer any questions you have and guide you through the process.
- Pre-Approval: Complete our online pre-approval form. This will give us an initial understanding of your financial situation and determine your eligibility for the 1% down payment program.
- Document Submission: If pre-approved, you’ll need to provide necessary documents such as proof of income, credit report, and other paperwork. Our team will guide you through what’s required.
- Homebuyer Course: Enroll in the mandatory first-time homebuyer course. This online course will equip you with essential knowledge about the home buying process.
- Loan Application: Once your documents have been reviewed and course completed, you can proceed to fill the formal loan application.
- Loan Approval: After careful review of your application and supporting documents, our underwriting team will make a loan decision.
- Closing: Once approved, we’ll schedule a closing date. At closing, you’ll sign all necessary documents, make your down payment, and finally, receive the keys to your new home!
If this sounds good to you, give us a call today at 770-740-4050 or click here to get more information and talk to one of our experienced loan consultants for more information.
Other low down payment or assistance is available
So what if you can’t qualify for this program? That’s OK, don’t be bummed out if you don’t!
In addition to our 1% Down Payment Option, Andes Mortgage offers a variety of other mortgage programs tailored to meet different needs.
For example, we have access to first-time homebuyer grants up to $5,200. Additionally, our down payment assistance programs can go up to 5% of your purchase price. These down payment assistants, also known as “DPA” programs, can help bridge the gap for those who may not have enough savings for a down payment.
If you’re a military veteran or service member, our VA Loans program provides mortgages with 0% down, no PMI and competitive interest rates. For those with a lower credit score, the FHA Loans program may be more suited, requiring only a 3.5% down payment and accepting credit scores as low as 580.
Meanwhile, homebuyers seeking to invest in rural property, the USDA Loans program offers 0% down for properties in eligible rural and suburban areas. Each of these programs have their own set of requirements and benefits.
Choosing the right one depends on your personal situation and home buying goals. Our loan officers are more than happy to provide you with information to help you make the best choice.
The bottom line
In a nutshell, thanks to our lending partners, we are able to offer this 1% down payment program to give our first time homebuyers a chance to homeownership. With just 1% down payment, it significantly lowers the financial barrier to owning a home.
But that’s not all – it also provides the stability of a fixed-rate mortgage, leaves room for financial flexibility, and is designed to ensure you have the capacity to repay your mortgage comfortably.
If homeownership is your dream, we at Andes Mortgage LLC are committed to help you achieve it. Feel free to reach out to us for more information or to start your home buying journey.
