With low money down and no mortgage insurance, CRA mortgages are worth a look. Today’s first-time home buyers are asking questions and doing research to help find the answer to the big question. “How much money will I need to save in order to buy a house?” Coming up with a down payment and money for closing costs can seem like an impossible goal. Sure, there are seller assist and down payment assist programs, but many loan programs are not compatible with these types of assistance. And without a minimum down payment of 10% borrowers can be obliged to pay mortgage insurance.
When buyers hear about low money down loans, of course they are intrigued to learn more and see if they qualify. Couple a lesser down payment with zero mortgage insurance and suddenly buying a home can be in reach much sooner than anticipated. And a CRA loan is exactly that. Low money down and no mortgage insurance required. Here is everything you need to know about CRA loans in Pennsylvania.
The CRA Loan is an affordable loan!
Here’s a little history. CRA loans became available, and were aptly named, following the Community Reinvestment Act of 1977. These loans were designed to assist home buyers of all income levels by making it more affordable to purchase a home in either moderate and low income areas. It also helped buyers with moderate to low annual incomes afford a home, who might not qualify for a mortgage loan under other programs. This helped young families and first time buyers to own a home and it also help to revitalize communities.
As little as 3% down.
Loans are like products, each with its own features like interest rate, terms and down payment requirements. Some loan programs can require 5% down. Other loan programs my allow less money down, but require the borrower to pay mortgage insurance. CRA loans are attractive because they have lower down payment requirements, requiring as little as 3% down, yet may home buyers simply aren’t aware that CRA loans are available.
No mortgage insurance.
Usually when loan programs permit for less money down, the lender will require the borrower to pay PMI, or mortgage insurance. This can add hundreds if not thousands of dollars to your annual mortgage bill. For those borrowers with a FICO score of 620 or higher, there is zero mortgage insurance required with a CRA loan. Subject to loan guidelines.
Refinance with a CRA Loan and Save
If you currently have an FHA loan and are still paying mortgage insurance, a CRA refinance could mean big savings for you. With a CRA loan, you can refinance your existing loan up to 97% of the appraised value…with no mortgage insurance. It’s certainly worth talking to a mortgage professional to see if you and your home meet the requirements for the CRA loan.
All the benefits of a CRA Loan:
- Not limited to first time buyers
- Compatible with down payment assist programs.
- Compatible with seller assist programs towards closing costs
- Lower down payment requirements…as little as 3% down
- Lower minimum credit score to qualify, minimum FICO score of 620
- No add-ons to the rate for condos
- 90 Day locks same as 30 day locks, with longer locks allowed
Do you meet the CRA mortgage basic requirements?
As with any loan program, the CRA has its own set of requirements in order to qualify. They may vary slightly from lender to lender, but typically the qualifying factors are:
- Subject to income limits
- You must own the home you are financing
- The borrower(s) must complete a home buyer education program if they have not owned a home within 24 months.
For more information about CRA loans and other loan options for Pennsylvania, please contact BMC Home Mortgage in Glenside PA. Take advantage of our no-cost, no-obligations consultation to review your financing plans, your credit history and today’s great rates.
Find out if you qualify and get pre-approved by a CRA lender.
Request a one-on-one consultation with a BMC Keystone Mortgage Professional.
- Find out if you qualify for the CRA loan or other money-saving programs.
- Know your credit scores and how they affect your rates
- Know how much house you can afford
- Overcome credit issues so that you can get the lowest possible rate
- Get a letter of pre-qualification
Request an appointment online or call our office during regular business hours at (215) 885-4828.
Trusted Mortgage Advisors
We shop the mortgage market and match you with the right lender.
Located in Glenside, BMC Keystone Home Mortgage is a Pennsylvania licensed mortgage brokerage. Simply put, we match home buyers with mortgage loans. We shop around, scanning dozens of lenders to find the lowest rates possible, the lowest fees and the loans that close as fast as possible.
Our knowledge and experience set us apart.
With all the different loans, pricing and guidelines, it’s important to have knowledge and experience on your side. We help borrowers choose the best mortgage based on their financial needs and offer assistance with obstacles such as credit issues so that they can get the lowest rate possible. You can count on attentive service, a quick loan approval and a smooth settlement process.
BMC Keystone was WONDERFUL!
“As a first time home buyer, we were very nervous about the financing. Terri was great and put all of our fears at ease. She was great in communicating where we were and what steps were next. She always responded quickly to any emails or voicemails. She truly made our home buying experience enjoyable. I would recommend her to anyone!”
-Zillow Review, Rerose44 from 19401