On Saturday, January 16th, we had a great Affordable Housing Seminar with information about 100% financing at our Kill Devil Hills office. Many attendees had questions about 100% financing so Leif Rasmussen, a loan officer from Metlife Home Loans, put together the following answers to the questions that were raised in the seminar.
Q: How much cash would I need in order to purchase a home?
A: Technically you would not need any money. The RD loan is 100% financing so there is no down payment and the seller can pay all closing costs.
Q: Do I have to have perfect credit?
A: No. The minimum credit score is only 620. If your score is currently below 620 we can offer credit counseling to assist you in getting your credit score up to 620.
Q: Does the RD 100% financing loan have a monthly PMI payment like FHA?
A: No. There is no monthly PMI included in your payment. On a $200,000 loan amount this would save you about $91 per month over a similar FHA loan.
Q: Is there a limit to the amount that I can borrow for a home on the RD program?
A: There is no limit to the home price. You are simply limited to the amount that your income will qualify you for.
Q: What are the income limits for the RD program?
A: The income limits are set by county. the limits for Dare and Currituck counties are:
Dare family of 1-4 people $73,600
Dare family of 5-8 people $97,150
Currituck family of 1-4 people $78,500
Currituck family of 5-8 people $103,050
Q: How do I know what payment I can qualify for?
A: the maximum house payment that you can qualify for would equal 29% of your gross income. Your total payments including the house payment and all other payments such as automobiles and credit cards cannot exceed 41% of your gross income. ( gross income is your income before any taxes or other deductions)
Q: I have heard that closing costs can run into the thousands of dollars. will I have to have a lot of cash for closing costs?
A: No. The RD loan programs allows the seller to pay all closing costs for the buyer.
Q: Is the RD loan program only for single family homes?
A: No. You may also get 100% financing on townhomes and condominiums.
Thanks Leigh for putting together these question!
Leif is available to answer any additional questions you may have about current loans and financing options. Feel free to drop a comment or email Leif at lrasmussen@metlife.com for further information.
