Hello. First post here but was wondering if anyone has had any experience with buying a property using the HomePath financing option. They are starting to pop up here and the terms seem pretty reasonable.
Hs anyone here actually closed a transaction using them?
I would (and do, any chance I get) strongly recommend them. We closed on our first one in May (owner occupant). The terms are great, but what was even better was working with the bank. They are quick to respond (we were under contract on day 6). We had some small hiccups with the title company that they chose but other than that it was great.
It is a very good deal. You can buy a house with 3% down, and up until recently Fannie Mae offered to give any buyer the 3%! However currently you can easily expect to get 1.5% toward closing costs IF you ask and they accept your offer, and have the seller pay the title insurance (which is customary anyway). You also can avoid PMI, an appraisal fee, and several other fees that you have with a typical FHA or conventional loan when you’re putting just 3% down.
The above figures apply to owner occupied homes only. You have to put a slightly higher % down when you buy a home for investor use.
Note - qualifying is the same with any conventional loan - even though you’re just putting just a little down. So your debt to income ratio, income levels, etc need to be in check.
You have to put a slightly higher % down when you buy a home for investor use.
Any rough estimate how much would that be? My local bank asks for 20% down payment. Will homepath be better than that for investors?
For investors it’s 10% down and no PMI. You can only have 1 home path loan at a time though.
On a related note, has anyone had any experience with making offer on a HomePath property? I was wondering if there is really any significant negotiating wiggle room on asking price?
I understand that you can offer anything you like, but was curious if they are accepting offers much below the bank’s listing price.
TIA
In my experience (we’ve put offers on about 4 or 5 Home Path properties) they have typically been priced so competitively that there hasn’t been much need for the bank to negotiate. We got into a multiple offer situation on one where we went in $13k over list price (this was for our personal property, not an investment) which would have still been a good price, and we were outbid. Every one was a multiple offer situation except the one we ended up getting, which we were able to negotiate down a few thousand and were under contract day 6 on the market (before we got into multiple offers again). We got the house around $50-60k below market value, so you can see it was already priced to sell.
If you see one that has been on the market more than 30 days or so, I’d say it’s worth your time to low ball. Unlike most REO properties, you should get a counter offer back within a day or two.