Lower Rates on Zero Down Payment Loan
Posted on September 2nd, 2010 by Darcy
A quick look at the rates today for the MN Housing programs sent us all into an uproar at the office. MN Housing is quoting 3.75%* for a government 30 year (yes, 30 years, not 15), fixed rate. This is for their MMP program which doesn’t require the 8-hour Homestretch class, offers no down payment assistance, but DOES offer a great rate. And when I say great rate, I mean “out-of-this-world-I-can’t-believe-it’s-not-an-adjustable-rate-Macaulay-Culkin-shocked-look” rate. This is off the charts. Who would have guessed we would not only see rates this low, BUT, see them on the special first time buyer programs? Certainly not me!!
Let’s look at some figures using a loan amount of $150,000 (these estimates do NOT include taxes, insurance, mortgage insurance or dues):
- Rate: 3.75%**
- Principal and interest: $695
- Total interest over 30 years: $100,042
Compare this to the rate prior to 4 PM today …
- Rate: 4.25%**
- Principal and interest: $738
- Total interest over 30 years: $115647
So, the monthy savings is just $43/month, which means $516 a year. Okay, so not really a HUGE difference; BUT, check out the 30 year savings in interest — over $15,000. That’s just crazy! You could take that $43/mo and add another $6000 or so to your purchase price. That may be worth it just to get into another price bracket.
So what about the zero down payment program? That rate came down too — also by 1/2% — from 5% to 4.5%** Remember, this program’s primary benefit, other than NO down payment, is that there is no private mortgage insurance (PMI). A regular 30 year right now is about 4.5% or less without using a first time program. Well, if you had less than 20% down, you would be required to have PMI. On the above $150,000 loan the PMI would be about $65 in your payment, eating away at what you could afford.
We are in some crazy times right now, but I cannot say it enough — NOW IS THE TIME to buy a home. There hasn’t been, and will probably never be, another time in our lifetime to have so many benefits — low rates, low home prices and many special first time buyer programs just waiting to help you get into your first home. Let me be the one to do that too!
*Rates are subject to change without notice. This is not an offer to enter into an agreement. **Assuming 5 days of interest on a $150,000 loan amount, the APR for these rates are 3.899%, 4.403% and 4.656% respectively
Tags: first time buyer programs, first time home buyer, home buyer seminars, low rates, rate, zero down payment
