Bank of America's New 3% Down Loan Program
Bank of America recently launched a new loan program that offers only 3% down to first time home buyers. The difference between this home loan and other moderately low down payment programs is that there is no private mortgage insurance (PMI). This could save borrowers thousands of dollars of the life-span of their loan, there are a few caveats though:
- 660 Fico Credit Score
- Cannot make more than median income in area
- Must be borrower's primary residence
- First time home buyers must take an education class
Although this loan program sounds more appealing than most other programs out there, don't rush to Bank of America just yet. The PMI is offset due to a higher interest rate over the life of the loan or a big upfront one time fee. This could also create some problems for investment companies and home owners alike. Since there is no mortgage insurance, tax payers will most likely have to take the hit due to defaulting home owners. Also, the same home owner will own less equity in their house at first, making higher payments and resale more difficult for them in the interim.
For more information on Anchorage, Eagle River and Wasilla real estate markets, contact our local expert James Cash at (907)-360-7448