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LOAN TO OWN PROVO REDEVELOPMENT
One of the better programs to minimize the down payment for buyers is the Loan-to-Own grant. For more information about the program visit www.housingservicesut.org .This program has income limits and other strict requirements that must be met in order to qualify. Please contact a mortgage officer for specifics.
Basically, this program will grant between $3,500 to $7,000 (depending
on your credit score) toward down payment and closing costs. The buyer
is required to pay one-half of the 3% down payment. The other half of
closing costs will be granted by the program. The amount of the grant
does get recorded as a second Deed of Trust. However, it is recorded at
0% interest with no payments due. 1/5 of the grant amount is forgiven
every year so that after 5 years the balance is zero. The only chance
of paying back the grant is if the home is sold (or refinanced in some
cases) before 5 years.
Example
Based on a Sales Price of $130,000
| FHA Mortgage
using Loan to Own for Down Payment and Closing Costs 30 Year Fixed Rate Loan |
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|---|---|---|---|
| Home 1 | Home 2 | ||
| Sales Price | $ 130,000 | ||
| Minimum Down Payment (3%) | $ 3,900.00 | ||
| 1.5% Down Payment paid by Loan to Own | $ 1,950.00 | ||
| Closing Cost Estimate paid by Loan to Own | $ 2,500.00 | ||
2/1 Buydown paid by Loan to Own |
$ 2,500.00 | ||
Total paid by Loan to Own |
$ 6,950.00 | ||
Money out of your pocket |
$ 1,950.00 | ||
Principle and Interest (P&I) at 5.875% interest rate |
$ 757.12 | ||
Monthly Mortgage Insurance |
$ 52.54 | ||
Tax Estimate |
$ 65.00 | ||
Insurance Estimate |
$ 28.00 | ||
Total Monthly Payment (P&I, M.I. Tax & Ins.) |
$ 902.66 | ||
*Closing Costs will also apply. Please contact your
loan officer for an explanation and estimate.
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