Many people are often intimidated by the thought of buying their first home. It seems like a very daunting when thinking about qualifying for a mortgage, as well as saving money for the down payment that will be needed. Fortunately, there are many different options that are easier to qualify for and require a low down payment. Below are a few options available to potential home buyers in Illinois.
@Home Illinois
@Home Illinois is a mortgage offered to Illinois residents. They offer a loan where you only have to put down $1000 or 1% of the purchase price, whichever is greater. You can also qualify for up to $5000 in closing cost assistance. To qualify for this loan, the max amount of income in Cook county and DuPage county is $84,751.31 for a household of 2 or less, and varies for other counties in Illinois. Visit athomeillinois.gov for more info.
FHA loan
An FHA loan is the loan people hear about when you mention loan options for 1st time loan home buyers. With an FHA loan, you only need a 3.5% down payment of the purchase price, compared to a 20% down payment for conventional loans. It is also easier to qualify for the loans as far as credit. Your credit score only needs to be 620, which is lower when compared to other loans.
FHA 203k loan
The FHA 203k loan is a specific type of FHA loan that will also loan the repair costs that is needed for the property. Some homes will not qualify for an FHA loan, such as foreclosures or homed that needs updating. A 203k loan will loan you the money to fix up the home on top of the money needed to purchase the home. This is the option for you if you are looking for a fixer upper, and could also be a good way to get a great deal on a home if you don’t mind a little rehab.
Fannie Mae HomeReady loan
Fannie Mae’s HomeReady mortgage is a loan program designed for low to moderate income borrowers. The Home Ready loan also offers a low down payment (up to 3%). They also allow you to use different sources of funds for your down payment, such as gifts from family members and grants. They do require you to take an online course on buying a home and explaining some of the details of home ownership. You can find more information about the HomeReady mortgage here.
So what is your next step? Research lenders in the area who offer these programs and speak to them about applying. Any questions or concerns? Feel free to contact me?