St. Louis Homeownership: 0% Down vs. 3% Down Mortgages

Thinking about buying a home in St. Louis? Deciding on a down payment amount is a crucial step. This article explores the recently introduced 0% down mortgage option and compares it to the traditional 3% down payment. We’ll also explore how Carlson Mortgage can guide you towards the perfect St. Louis mortgage solution.

The 0% Down Mortgage: A New Option

United Wholesale Mortgage (UWM) introduced a program allowing home purchases with no upfront payment (except closing costs). This might seem risky, especially in today’s market. However, let’s break it down:

• Silent Second Mortgage: This 3% down payment is actually a silent second mortgage. You won’t make monthly payments, but it becomes due when you sell or refinance.

Qualifying for 0% Down in St. Louis

There are two main ways to qualify for this program:

• Income-Based: For those with income at or below 80% of the Area Median Income (AMI) for your desired property, you can qualify through Freddie Mac’s Home Possible® program. This requires a 620+ credit score and a loan-to-value ratio (LTV) between 95% and 97%. Very-low-income borrowers (at or below 50% AMI) can receive a $2,500 credit towards the 3% down payment.
• First-Time Homebuyers: If your income is higher, you can qualify if you’re a first-time homebuyer (not owned a home in the past 3 years) and meet Freddie Mac’s HomeOne® and UWM’s guidelines. This requires a 700+ credit score and an LTV greater than 95% (up to 97%).

3% Down Payment vs. 0% Down

So, how different is 0% down from the traditional 3% down payment? Both offer low upfront costs. The key difference is the silent second mortgage with the 0% option.

Carlson Mortgage: Your St. Louis Mortgage Experts

Whether you’re considering a 0% down, 3% down, or another mortgage option, navigating the St. Louis market requires expert guidance. Carlson Mortgage can help! We offer a wide range of loan options and personalized service to find the perfect fit for your financial situation and homeownership goals in St. Louis. Contact us today for a free consultation!

Ready to find your dream home? Contact Carlson Mortgage, your trusted St. Louis mortgage broker, for a free consultation. Call or text us at (314) 329-7314 or fill out our loan application at www.carlsonstl.com/apply.