The HomePath program has been getting a lot of attention lately. So what is it, and what can it do for you?
HomePath is a website owned by Fannie Mae that shows properties that have been foreclosed on and taken back from the owners. These are often referred to as real estate owned (REO) properties.
These properties can be in very good shape or in need of major repairs. They are often heavily discounted in price. Keep in mind, though, that whatever their condition, they are all sold as is.
Some disclosures state that anything needing attention once the closing is complete is on the shoulders of the buyer. In other words, once you own it, you own it. On the financing end, the good news is that for those who qualify, and many people do, there is no mortgage insurance required, even with down payments as low as 3.5%.
There are also no appraisals or surveys required, meaning that closing costs are lower than they would be on a traditional mortgage, as these items can cost $300 to $500 each. The mortgage rate will be slightly higher on a HomePath loan than on a traditional mortgage. That’s because Fannie Mae charges a premium to offset the fact that there is no mortgage insurance.
Plan on allowing 30 days to get to the closing table once you apply. HomePath loans are considered specialty products, and while they don’t need to go to Fannie Mae to get approved, there are only a handful of lenders that actually handle these types of mortgages.
For more information on HomePath, visit www.HomePath.com.