If you don’t know by now, MGIC, and other 3rd party private mortgage insurance (PMI) companies are only insuring up to 97%. What this means to you, is that now you have to put a minimum of 3% as a down payment. No matter how good your credit score or how much in liquid assets you can prove, it’s just a new guideline they have put in place.
So, how do you still do a no down payment, 100% financing, on your purchase or refinance in Wisconsin? Here are the 2 ways that are simple and most people have no idea they can do this.
1. Have the seller pay for your down payment! If you are looking to buy a home and have little to no money for a down payment, ask the seller to pay for the down payment. If you are working with a realtor, explain to him/her that you want to write in your offer to purchase that the seller pays for your 3% down payment. Are you wondering what loan program allows this? Wisconsin FHA loans allow the seller to contribute to the buyer’s down payment.
Also, if you have the opportunity, have the seller pay for your closing costs. Think about it, you are in a buyer’s market and sellers that have been trying to sell their home all winter and are just itching to get rid of it. If I were selling my home, and the only thing that stands between selling my home or not, is paying for 3%of the buyers small down payment…where do I sign!
2. You can have a relative gift you the down payment. These lenders are only requiring that the relative that is gifting you the funds, fill out a gift letter form and show proof the money came from them. Simple. For some reason, I run into many people that didn’t know their, rich uncle or grandparents, can gift them the small 3% for a down payment.
Learn more about no down payment mortgage loans for first time home buyers.
