There's a new loan program called One+ that allows you to
buy a home with only 1% down.
And we offer this on our mortgage team in all 50 states.
And so what's really nice about this program is if you're wanting to buy
a house, but maybe you just saw how much closing costs are and you're
like, oh my gosh, we can't save for a down payment, plus closing costs.
Or maybe you don't want to empty your bank account to buy a house, or
you wanna continue paying off debt, or you wanna do some work to your
home, or you just want to paint the bedroom, have some money left over.
The One+ loan can be really helpful to reduce the amount that
you have to bring to closing.
So you can buy a house earlier if you would like to.
So the way that this works is it's 1% down.
And the way a down payment works is you take the percentage
times the purchase price.
So a $300,000 home with 1% down.
You then have $3,000 as your down payment.
Now this is coupled with a 2%.
Forgivable grant, which I'll talk about here in just a second.
So the loan is a conventional type of loan which sellers really prefer, and
conventional loans require a minimum of 3% down for most home buyers.
So what this is doing here, obviously one plus two equals three.
So you're getting a 2% grant and you only have to contribute 1% down.
What's really interesting about this is most down payment assistance
type loans usually have a lot of strings attached to them.
Usually in the form of a second lien on the home, meaning maybe
there's some resale restrictions.
Maybe if you sell within five years, you have to pay it back.
Sometimes you have, you know, you have to pay the monthly payment on top of that, so
sometimes this gets converted to a loan.
What's really interesting about this is in this loan that's not the case.
It's completely forgivable at the time of closing.
So there's no lien, there's no monthly payment, no payback,
and no terms on this either.
This is completely forgivable grant giving you 3% equity at closing.
Now, something to be mindful of is, you know, you're gonna
have 3% equity at closing.
So if you buy the home and close on it and then you're looking to
sell within a year, you may have to bring money to the closing table.
You probably won't have enough equity to sell your home at that
point and make money from it.
So just be aware of, you know, when you have lower down payment
options that you plan to stay in the home for at least five years.
I think that's a good rule of thumb for buying a house no matter what
your down payment is, to make sure you can recoup the money you put into it.
But just keep that in mind with lower down payment options.
You have less equity in the home, so you will have 3% total equity at closing.
Okay.
So quick example here.
Let's say we're looking at a 325 thousand dollars purchase price.
So in that case we have 1% as our down payment, that'd be $3,250.
Then you would be getting a grant at closing for $7,150,
totaling you to a 3% down payment.
Now, that's not the whole picture, okay?
You do still have closing costs.
Closing costs are things that you're gonna pay even if you're not getting a loan.
Okay?
So the way closing costs work is you're going to have
whatever your lender charges.
You're also going to have things like an appraisal.
You're gonna have a title search.
The county that you're closing in is gonna charge money to record
your deed and your mortgage.
You're gonna have taxes, you're gonna have homeowner's insurance.
And it's important to keep those things in mind.
A general rule of thumb is closing costs will be around
two to 3% of the purchase price.
In higher cost areas, they can be more.
In some areas they can be less.
So it's hard to just give a general rule of thumb.
You'll wanna get a pre-approval to see exactly what your closing
costs are in your area, because they are area dependent, primarily
because of homeowner's insurance property taxes, and then also any
transfer taxes your state may charge.
So if you are looking to get a Pre-approval.
We offer free pre-approvals all throughout all 50 states.
So we have a mortgage team of helpful experts who'd be happy to help you.
If you're interested, you can go to WintheHouseYouLove.Com.
Okay.
So some general requirements we wanna look at here with us.
The minimum FICO requirement is 620.
This is the minimum FICO requirement needed for.
Any conventional loan.
So it's important to keep that in mind.
Keep in mind too that what you're seeing, your Vantage score pulled on
something like a Credit Karma or something like that is not your FICO score.
Even on My FICO, it's not your mortgage FICO score.
The way to get this number is getting it pulled by a mortgage
lender who has access to these.
Okay?
So 620 is the minimum.
Also there is an income limit and it's equal to or less than or equal
to 80% of the area median income.
So I have a tool linked in the description to show you how to look this up.
Okay, so this is how to look up if you're under the Area Median Income limit.
So go to the tool in the description.
It's called the Fannie Mae Area Median Income Lookup tool,
which is a bit of a mouthful.
What you'll wanna do is go through where you're looking at.
And click in here or you can enter an address.
It's then gonna show you 80% Area Median Income.
The one with the arrow pointing to it is exactly what we want here.
So I'll zoom in just a touch so we can see the website is such difficult to use.
We can see in this area be $60,000.
In other areas.
Let's say we're looking over here, that's lower.
Let's see.
Let me find another area.
Let's see.
Maybe I need to get out of the state.
Let's see.
We're looking in Columbus, for instance.
It's wow, 76.
I wish that thing would go away.
$76,000.
For the area median, 80% of the Area Median Income limit.
So you need to be at that number or under it.
Now one interesting thing about this loan that we can do is we can actually exclude
income if we need to make sure that you're under the Area Median Income limit.
So the way that this works is if you have variable income, so things
like bonus income over time, shift differentials, we can actually exclude
that from the mortgage application.
To get you beneath area median income.
We can also exclude things like if you have pension income or social security.
If you're not using that to qualify for the loan we can
remove that to get you under 80%.
Now, you do still have to qualify with the income that we show on the loan.
So if we remove, you know, let's say bonus and overtime and commission
income but all that leaves you with is, let's say theoretically $20,000 a
year, then it's, you won't be able to purchase a home because you have to
be able to qualify with that income.
So we can help you with that if you're interested.
But that is one nice little trick because sometimes people will have, you
know, maybe bonuses or overtime that will push them over the income limit.
And if we can exclude that, if we don't need it for your debt-to-income ratio and
the mortgage approval, we can exclude it.
What's really nice about this program is there's no PMI
ever, no mortgage insurance.
PMI is just a monthly cost.
If you're putting less than 20% down on conventional loans, there's no mortgage
insurance with this loan, which is gonna reduce the monthly cost for you.
Also you do not have to be a first time home buyer.
So it's either for first time home buyers or if you already have purchased a home.
This just does have to be a primary residence, meaning you intend
to live in the home for at least a year and only for one unit.
You cannot purchase a multi-family.
Now here's the big kicker.
That everyone's gonna be upset about.
You're not gonna probably be able to buy a home in California because
the maximum loan is $350,000.
So keep that in mind.
It's gonna be great for a lot of people and not great for a lot of other
people because of that max loan limit.
So do keep that in mind when you're looking.
If you're looking at using this program, and if you're curious
about how much home could I afford I have a calculator that does this.
It's gonna you put in your information about your income and your debts.
It's all private for you in a Google sheet, so I don't get to see any of that.
And what it'll do is show you an affordability dashboard, shows
you your Max Purchase Price.
An estimated payment, estimated closing costs.
And then we'll show you a bunch of different affordability theories
around what you can afford.
That way you can explore the numbers without having to talk with a
loan officer if you don't want to.
And just get a feel for how do these numbers change if I change things
with my income or with my debts?
How does your affordability change?
And if you'd like to get that calculator it's at WintheHouseYouLove.com/maxprice.
Okay.
So a couple other features here.
You obviously are doing 1% down minimum on this loan.
If you want to, if you wanna add more to the down payment,
you can do that up to 2.99%.
So if you wanted to, you could do basically 3% plus an additional 2% grant,
which would give you 5% total down.
But most people are probably gonna do the 1% seller credits are
allowed, and this is where you can negotiate for the seller to pay.
A portion are all of your closing costs.
And what most people will do on a conventional loan is around 3% or less.
So 3% would be the maximum with this loan to get as closing costs from the seller.
So for instance, if you're buying a $300,000 house, maybe you go
to the seller and say, we'd like to request 2% seller credits.
So they would give you $6,000 at closing to pay down your closing costs.
Okay.
So that can help you really bring as little to closing if
you wanted to, you know, 1% down.
And if you can reduce your closing costs as much as po as possible from the seller
credit, you really are bringing very little to closing to purchase your home.
And I know a lot of people get this weird, like, they get this weird
thing where it's like, if you bring little money to closing on a home,
then you don't deserve to buy a house.
It's just so dumb because, People don't always want to just wrap
their money up into a down payment on a home, maybe you're working
on improvements for the home.
You have furniture, you have moving expenses.
You might have to buy out your lease of where you're at.
There are other expenses to buying and moving and switching where you live.
Than just the down payment on a home and having a lower down payment
doesn't mean that you're a bad person, doesn't mean you're bad with money.
And I think when these programs are available it's really wise to take a look
at seeing if this is an option for you.
So please take that pressure off yourself.
A lot of people just do this weird thing, like if you don't have 20%
down, you're morally a bad person.
It's just not the case.
You don't have to have all your money wrapped up into a down payment.
I'm sure you might wanna pay down debt, have an emergency fund, pay for
furniture, all those things are fine.
Okay?
Temporary buy downs are allowed.
This is where you might get a two one buy down.
So basically the seller would give you money that helps lower your
monthly payment in year one and two.
I have a video on two on buy downs if you're interested in it, I don't think
they're super amazing as products, but if you're interested in 'em they're there.
And then also you're gonna have really low rates with this type of loan because
there's no Loan Level Price Adjustments.
Loan Level Price Adjustments are kind of the interest rate changes that
have been happening over the past.
Or at least changes have been happening to them over the past couple months that
a lot of people have been upset about.
And you will have none of those Low Level Price Adjustments on this
product making it a lot lower of a rate than a standard conventional loan.
Okay, so let's do a quick comparison with a $300,000 purchase, and let's take a
look at what's called a HomeReady loan.
So HomeReady is a conventional loan.
That normally you would get if you had these same requirements, you made under
per 80% of the Area Median Income.
You're doing 3% down.
You have above a 620 credit score.
You're gonna get a HomeReady loan that's the best loan for you.
It's a type of conventional loan.
Most people don't even know that they have it.
It's just that the word or the classification of conventional loan.
There's HomeReady, there's Home Possible.
Your lender does this for you and most people don't even know about it.
So on a HomeReady loan, In the situation like this, the mortgage
insurance would be about $95 per month.
Okay?
In the down payment, 3% would be $9,000.
Now, if we do a One+ program, a One+ loan, the only thing that changes is we
save a lot of money that we have to pay.
We have $0 PMI, so no monthly mortgage insurance.
So we're saving just shy of a hundred bucks a month again on a $300,000 loan.
And we're only putting 3% down.
The rest of the six thousand dollars is a grant that you get that's
already equity in the property.
So, that's how it compares.
So if you are curious, if you wanna learn more about this program, if you
wanna get one and get pre-approved for it we do offer this in all 50
states through our mortgage team.
So what you'll wanna do is you wanna get pre-approved for this, okay?
You don't wanna just start looking at houses and hope for the best.
You really wanna make sure you actually can get approved for a loan
before you go put earnest money down on a home and potentially lose out.
On that earnest money if you weren't qualified for a mortgage.
So you wanna get pre-approved.
You also wanna see all of your numbers.
I'm amazed by the people who talk with lenders and they never see
what their interest rate is or their monthly payment or their closing cost.
You should be getting a full breakdown of your interest rate, your monthly payment.
That should include estimated taxes, homeowner's insurance, HOA.
If that's an area that you're looking in the closing costs should
not just be your down payment.
You should be able to see a full estimate of third party fees, even
that your lender doesn't charge because you wanna see a full picture
of what you're getting yourself into.
And then after that, you can talk with a real estate agent
and start shopping for homes.
When you find one you like, you can write an offer and then if the seller
accepts it, you can close on that home.
Okay?
And you can get pre-approved at WintheHouseYouLove.Com.
It's free.
We would be happy to help.
And so this loan is based on a conventional type of loan.
There are so many other requirements to go with conventional loans, so
if you wanna learn more about that, I have an in-depth video right here
on conventional loan requirements.