Homepath Loan

So when a lot of people here the word Fannie Mae it may conjure up evil corporate images etc... But in reality Fannie Mae is just Federal National Mortgage Association (FNMA). Their purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities which then allows lenders to reinvest their assets into more lending and in effect increase the number of lenders in the mortgage market by reducing the reliance on thrifts.

Now there really isn't any way to make that sound any easier but in essence its just a government partially funded company that makes it easier for more places to lend money, i.e. easier for some people to get a mortgage or loan.

-Low Down Payment
-No Mortgage Insurance

On a side note although it doesnt necessarily help everyone, it's also an option for investors looking to help clean up the foreclosure mess.

With so many foreclosed homes on the market now, and more foreclosures reportedly on the way, many neighborhoods look abandoned. In some markets, short sale and bank owned homes make up about 30% of the for-sale listings. That's a low-to-average number. Other markets are seeing 40-50 percent. Turning these homes into lived-in abodes is one goal of Fannie Mae, since they own a lot of foreclosed homes. So the mortgage giant came up with a system of marketing, listing and financing these homes called HomePath®. This option allows the buyer to buy a Fannie Mae-owned house with a low down payment (3%) and no mortgage insurance (ask your mortgage consultant about cost details on loans without mortgage insurance) and other incentives.

If you go to the HomePath website you can easily type in the desired area you want to browse for houses in. It took me about 5 minutes before i found the house that i would buy if i were in the market right now. A beautiful 4 bedroom 2.5 bath home with a finished basement in Byron Center a nice little area. Now here's the upshot, since its a forclosure, its a $400,000 house for $220,000, thats almost half off. Not only is it already 180k off but through HomePath you are only required to put 3% down. This means that its an affordable deal for a good percentage of the population depending on your other personal financial factors and spending habits. Heck if the neighborhood your buying a Homepath home in is closer to your work or school the amount it could save you in gas might already make it worth it.

Either way, if you are thinking about a HomePath in Grand Rapids or Michigan for that matter, Treadstone Funding would be happy to help. We are one of few lenders certified to do HomePath loans and we guarantee a start to finish loan process time that is no longer than any conventional loan.

For a list of HomePath homes in Grand Rapids go to: http://www.homepath.com/search.html?openHouse=&st=MI&cno=081&ci=&zip=&src_ref=&mlsid=&pi=&pa=&bdi=&bhi=&x=50&y=6

To Inquire with Treadstone about getting started on your HomePath home search or loan email: kevinp@treadstonemortgage.com

One of the seldom mentioned requirements if you are using HomePath as a renovation loan is that all Renovation must be completed within 6 months of the loan closing. So six months after you sign the papers and dot your "i's" you better hope your contractor has completed all necessary upgrades and changes to make the house livable and appraisable at the amount of the HomePath Loan. Now i dont say this to scare everyone, its still one of the best loans you can get and can save you a ton of money. I'm just saying to do your research before you hire your contractor. Most mortgage companies have contractors and workmen who they trust and who they know will get the job done for you well. If not its always a good idea to google the person see their reviews etc.

My company, Treadstone Mortgage in Grand Rapids, MI has about 5 licensed contractors we like to use and we usually provide their contact information to our clients if they need them.

As always if you have any questions just email me!

Adjustable Rate Mortgage (ARM)

An adjustable (ARM) or variable rate is typically fixed for a period of time before moving into its adjustment period. The fixed period can be anywhere from 1-10 years and typically offers a substantially lower interest rate than a fixed rate. Once the initial fixed period ends, the rate may adjust up or down dependent on market conditions. Subsequent adjustments are either every 6 months or once per year.

Appraisal

The appraisal is a written estimate of a property's current market value and will be prepared by a licensed appraiser. Once you complete your home inspection, the appraisal will be ordered.

Bi-Weekly Mortgage

This option has become increasingly popular as a means to pay your loan down in a shorter amount of time.
Here is how it works: You pay half of your monthly mortgage payment every other week which results in 26 payments being made over the year. This additional payment is put towards principal and allows you to pay your loan off in a shorter amount of time.

Escrow

An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the earnest money deposit is put into escrow until delivered to the seller when the transaction is closed.

Fixed Rate Mortgages: A mortgage in which the interest rate does not change during the entire term of the loan, most often 15 years or 30 years.

Good Faith Estimate: A written estimate of closing costs that a lender must provide a prospective home buyer within three days of submitting a mortgage loan application. The best approach is to request this list before choosing a loan.

Interest Rate: Your mortgage interest rate is the price of money you are borrowing to purchase a home. The interest rate will fluctuate dependent on market conditions and is used to calculate the interest payment you make to the lender.

Mortgage Insurance: A policy that insures the lender against loss should the homeowner default on a mortgage.

HomePath Mortgage allows a borrower to purchase a Fannie Mae-owned property with a low down payment, flexible mortgage terms, no lender-requested appraisal, no mortgage insurance and expanded seller contributions. The final sales price is used to underwrite the loan. Mortgage insurance is also not required but for higher loan to value loans, there may be a cost. Borrowers should ask their lender for cost details.

HomePath Renovation Mortgage allows a borrower to purchase a property that requires light to moderate renovation. The loan amount includes both the funds for the purchase and for the renovation. The borrower works with the lender and the contractors to determine the renovations. The lender manages the renovation funds. An appraisal is required for this mortgage product and the renovation amount is based on the appraised as completed value.

Both mortgage products are available to both owner occupants and investors. HomePath financing is only one option in financing a Fannie Mae-owned property, and its use is not required. The borrower should always choose the best mortgage product that meets the needs of the borrower and the property.