October 3rd, 2018 1:39 PM by Jackie A. Graves
The clock is
ticking. Although prime homebuying season is sliding away, October is still a
good time for homebuyers to assess their loan options as mortgage
rates continue to rise.
inventory and high prices are keeping many buyers on the sidelines. Homebuyers
on a budget and those who need more flexible credit requirements have options
available. Here we take a look at two such loan programs.
set of Americans are just trying to pick up the pieces. The impact of Hurricane
Florence in the Carolinas has been devastating. It’s a reminder that few
homeowners are immune from the impact of natural disasters. Find out how you
can protect you home with this month’s mortgage tips.
flood insurance (even if you’re not required to)
count, the wind and flood damage to residential and commercial structures by
Hurricane Florence is an estimated $20 billion to $30 billion, according to a
report by CoreLogic. Unfortunately, more than 85 percent of the people affected
by this devastating natural disaster were not covered by insurance.
underinsured is a problem across the country, says Amanda Bryant, director of
operations at National Flood Insurance LLC. People assume they’re safe from
flooding if FEMA doesn’t label their area high risk and their lender doesn’t
require the coverage.
flood maps, showing high-risk zones. But FEMA is sometimes 20, 30 and even 40
years behind with that mapping process. And they don’t take into account storm
surge,” Bryant says.
The truth is
that even if your home is destroyed by a natural disaster, you’re still on the
hook for your mortgage. For most homeowners, flood insurance should
be a given, Bryant says.
The good news
is flood insurance is relatively cheap for homeowners who aren’t required to
have it. Premiums can be as low as $400 per year, Bryant says. The bad news is
that most lenders won’t escrow a voluntary flood policy, including the premium
in your monthly mortgage payments. For homeowners, this means paying the annual
premium upfront in one lump sum.
who opt for voluntary flood insurance can always open a high-interest savings
account and have money automatically deducted from their paycheck. At the end
of the year, they can use those funds to pay for their insurance while earning
a couple bucks in interest.
down-payment mortgages and closing-cost cash
want to lock in a mortgage rate while they’re still under 5 percent, but don’t
have the resources for a big down payment, can explore specialty programs
that offer low down-payment options.
DreaMaker Mortgage is one such program. This home loan features lower mortgage
insurance requirements as well as down payments as low as 3 percent, if your
credit score is 680 or higher. For those with scores of at least 620, a 5
percent down payment is required.
folks looking for a house in a low- to moderate-income community (LMI) stand to
gain up to $2,500 in assistance through Chase’s homebuyer grants program.
DreaMaker borrowers can get an extra $500 if they complete Chase’s homebuyer’s
education course. These funds would go toward closing costs.
or existing Chase deposit customers can also earn $500 if you enroll in
automatic mortgage payments with your Chase account.
Affordable loans for medical-school grads and other
2015, the average medical school debt for graduating physicians was $183,000,
according to the Association of American Medical colleges. Add undergraduate
debt to that, which is an estimated average of $24,000, and many doctors enter
their career with over $200,000 in debt.
help lessen the burden for physicians, many mortgage lenders offer loans
designed for recent medical-school graduates. Last year, 19,000 people
graduated from medical school in the United States, so these loans can impact a
lot of new doctors who need a helping hand.
including SunTrust, Bank of America and BBVA Compass offer home loans for
licensed residents, interns and practicing doctors. SunTrust’s Doctor Loan
Program offers 100 percent financing to practicing doctors for loans up to
Compass allows practicing physicians and medical students to get a loan with no
down payment and no private mortgage insurance requirement.
of these professionals have their savings tied up in their business or private
practice, leaving with less to invest in a home,” says Jose Luis Pascual,
director of real estate secured lending originations at BBVA Compass. “We also
offer a similar program for attorneys and CPAs.”
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