Community Home Buyers Program - Version 2

As a first-time home buyer, we recommend that you get prequalified once you have determined that you satisfy all of the program requirements. PMC's prequalification service, offered at no charge or obligation, will mail you a report detailing your maximum purchasing power under the specified program. PMC is proud of its accurate prequalification service. In our history, if our client didn't purchase above our recommended maximum sales price, we have never had a client declined for the mortgage loan ! Click here to go to the prequalification page.

Version # 2 - 3% Down Payment Option

BENEFITS:

Down payment

• A program that allows only a 3% down payment to be your own money is quite generous. For most loan programs, 5% is the minimum required down payment.

Closing costs & Prepaids

• These expenses incurred in a purchase transaction are allowed to be paid from the following sources: gift, seller contribution (3% of the sales price - maximum), and/or a lender contribution *.

Qualifying ratios

• Housing ratio = 38%: Your proposed housing payment cannot exceed 38% of your gross monthly income) - most ordinary loan programs offer a maximum of only 28%, so you can in effect "buy more house."
• Debt ratio = 38%: Your proposed housing payment plus your monthly recurring debts cannot exceed 38% of your gross monthly income) - most ordinary loan programs offer a maximum of only 36%, so again you can in effect "buy more house."

Reserves

• Under ordinary loan programs, the lender will not approve you unless you can demonstrate that you have at least 2 mortgage payments "in reserve" after all of the down payment, closing costs, and prepaids are paid. This requirement is reduced to one under this program.

REQUIREMENTS:

Cash

• You must have enough to afford a minimum of a 3% down payment (e.g. if you were considering, perhaps, a $100,000 house/condo/townhouse, you would need at least $3,000). This money would need to be your own money and in a savings, checking,or money market account. If these funds are literally in cash ("mattress money") or if from the proceeds from the sale of a fixed asset, it still may be used, but call our office for details.

Income

• Your combined gross annual income cannot exceed $52,900 (100% HUD median).

Property

• Single family, owner-occupied residences only - no duplexes, investment properties, 2nd homes etc.

Education

• You must complete a first-time home buyer education course. PMC's owner, Laurence E. Ostrom (see About PMC), is a certified instructor. Not to worry, it's easy and it is something that you don't need to complete until after you're well into the purchase transaction.

 

COSTS:

• Market interest rate/points for a 30-year fixed-rate mortgage (no "add-ons") - Call 610-436-5397 for current rates
  
  
• Mortgage insurance - 25% coverage monthly plan: loan amount x .0067 / 12
  
  
• Cash-to-Close: We will detail every expense on our prequalification report. Click here to go the prequalification page.

*Notes*:

• Lender contribution (If needed) - As a rule a thumb, if needed, the mortgage company can give you about 2 points (each point is 1% of the loan amount - so on a $100,000 house with a $95,000 mortgage, 2 points = $1,900),To offset this contribution, the mortgage company will increase the interest rate by about 0.50%. This rule of thumb is not exact -- call 610-436-5397 for a quote (just like interest rates, this may change daily).** FEEL FREE TO PRINT THIS PAGE FOR YOUR REFERENCE **

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