At Raleigh Mortgage Group, we’re committed to making homeownership accessible for buyers in the Raleigh, NC area.
Our 1% down payment mortgage program is a game-changer for those looking to purchase a home with minimal upfront costs.
As a local mortgage company with over 20 years of experience, we specialize in tailoring solutions to meet the unique needs of the greater Triangle community.
Whether you’re a first-time homebuyer or seeking an affordable path to homeownership, our conventional 1% down payment mortgage offers an excellent opportunity to achieve your goals.
What Makes Conventional 1% Down Programs Different?
The conventional 1% down payment mortgage stands out from other conventional mortgage options due to its low entry barrier.
Unlike FHA loans, which require a minimum of 3.5% down, or traditional loans typically needing 3-5%, this program allows qualified buyers to secure a home with just 1% of the purchase price as a down payment.
Here’s what sets it apart:
- Purchase Only: This program is available for purchasing a home only, unlike other programs that may offer options for refinancing or a home improvement loan.
- Low Down Payment: Contribute only 1% of the home’s purchase price, making homeownership more attainable.
- Lender Contribution: The lender contributes the lesser of 2% or $7,000 toward the down payment, while the borrower pays 1% (or the remaining amount if 2% exceeds $7,000).
- No Private Mortgage Insurance (PMI): Unlike many low-down-payment programs, some 1% down options eliminate the need for PMI, saving you hundreds of dollars monthly.
- Loan-to-Value (LTV): Requires a 97% LTV ratio.
- Underwriting: Eligible for LPA or DU.
- Flexible Terms: Available for single-family homes, condos, and townhomes, with fixed-rate or adjustable-rate mortgage (ARM) options.
For example, for a $200,000 30-year fixed-rate loan at 6.50% with 97% LTV, the principal, interest, and MI payment is approximately $1,324.14, with an APR of 7.059%.
This includes an estimated finance charge of $5,600 (excluding taxes and insurance). This program is ideal for buyers in Raleigh’s competitive housing market, where affordability can be a challenge.
What Are the Requirements for This Mortgage Option?
To qualify for a 1% down payment mortgage in Raleigh, NC, borrowers must meet specific criteria.
While requirements may vary by lender, the general eligibility guidelines for mortgage approval include:
- Credit Score: A minimum credit score of 620 is typically required, though higher scores may secure better rates.
- Debt-to-Income Ratio (DTI): Your DTI should generally be below 45%, ensuring you can manage monthly payments alongside other debts.
- Income Limits: This program is designed for borrowers with an income at or below 80% of the Area Median Income (AMI) to ensure it benefits those who need it most.
- Homebuyer Education: First-time homebuyers may need to complete a homebuyer education course to qualify.
- Property Type: The home must be a primary residence (single-family home, condo, or townhome) located in an eligible area.
Our team at Raleigh Mortgage Group will guide you through the qualification process and discuss your 1% downpayment loan options and rates, ensuring you understand every step involved to buy a home in Raleigh.
What Type of Buyer Is the Program Best Suited For?
The 1% down payment mortgage is designed for buyers who want to enter the Raleigh housing market with minimal upfront costs.
It’s particularly well-suited for:
Young Professionals ➡
Individuals or families with steady income but limited liquid assets due to student loans or other expenses.
Buyers in Competitive Markets ➡
Raleigh’s fast-paced market often requires quick action, and this program allows buyers to act without needing a large down payment.
First-Time Homebuyers ➡
Those new to homeownership who may not have substantial savings for a down payment.
Veterans and Active-Duty Military ➡
While VA loans are an excellent option, those who don’t qualify can turn to this program as an alternative.
Apply for an Affordable Down Payment Mortgage in Raleigh
The 1% down payment mortgage offered by Raleigh Mortgage Group is a powerful tool for making homeownership a reality. With flexible terms and minimal upfront costs, this program opens doors for first-time buyers, young professionals, and others looking to settle in our vibrant community.
Our experienced team of Raleigh mortgage brokers is here to assist you throughout the application process. To get started or to learn more, reach us today by calling [phone] or filling out our convenient online contact form below.