The Fannie Mae Homepath loan program is a great option for the right type of buyer. How will a buyer know if the Homepath loan is the correct program for him? Let's examine a few distinct features of this program to help determine who it benefits the most.

Features

No Monthly Mortgage Insurance

This is usually the biggest selling point for a FNMA Homepath installment loan with bad credit. Most times it is advertised as "No Mortgage Insurance" while this is technically true it is a bit misleading, while there is no monthly mortgage insurance premium that you will pay, there are Loan Level Pricing Adjustments (government mandated fees, based on the riskiness of the loan), which are typically going to land you with the highest interest rate available for that day, plus additional closing costs depending on the occupancy of the property, so while you are not stuck with a mortgage insurance payment for the life of the loan (like with an FHA loan), you are paying a higher interest rate for the life of the loan. Generally speaking the difference in the interest rate between a standard FNMA loan and a FNMA Homepath personal installment loans for poor credit is less of an increase in the monthly payment than monthly mortgage insurance would be. However even though it is not labeled as mortgage insurance you are effectively paying an upfront mortgage insurance fee in the form of Loan Level Pricing Adjustments and monthly mortgage insurance in the form of a higher interest rate.

For the right borrower, this is acceptable and even advantageous.

No Appraisal Required

This is one area that Homepath can save some money, an average appraisal at least in my area runs between $400 - $500. A Homepath Loan does not require an appraisal and uses the contract price for the value of the home.

When Does a Homepath Loan Make Sense

There are several scenarios in which it would make sense to consider a Homepath online instalment loans

These are just a few examples where the Homepath program would make sense for a borrower to make use of. Keep in mind that Homepath loans are only available on Fannie Mae owned properties that are Homepath eligible. Homepath loans are not required on Homepath eligible properties and are sometimes not the best option even when available, however for the right set of circumstances it is a fantastic product. Speak with your mortgage professional to ensure that the program makes the most sense in your given situation

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