Plus Tips to Avoid 5 of the Biggest Mistakes
Homebuyers Make
No homebuyer wants to pay more than they need to. Yet, each year
thousands of homebuyers miss out on down payment and closing cost
assistance. Fifth Third Mortgage introduces its new Down Payment
Assistance Program to help consumers purchase homes.
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View the full release here:
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Cincinnati high school Spanish teacher,
Gustavo Benedetti, used one of Fifth Third's assistance programs to
buy his three-bedroom house. Fifth Third's Down Payment Assistance
Program offers 3 percent of the purchase price in down payment
assistance, up to $3,600, for low-income borrowers or those
purchasing in a designated low-income area and financed through
Fifth Third. (Photo: Fifth Third Bank)
“We want to help build strong communities,” said Chad Borton,
head of the Consumer Bank and executive vice president for Fifth
Third Bancorp. “We know that making homes affordable is one of the
best ways we can help improve our neighborhoods.”
Fifth Third’s Down Payment Assistance Program offers 3 percent
of the purchase price in down payment assistance, up to $3,600, for
low-income borrowers or those purchasing in a designated low-income
area and financed through Fifth Third.* The program is paired with
the Freddie Mac Home Possible Advantage Mortgage, a product with a
3 percent down payment and reduced mortgage insurance premiums.**
Fifth Third’s program also can be combined with state and local
programs to help consumers take advantage of free money for their
down payments.
“You really need someone to guide you through the house hunt and
the purchase,” said David Gunn, mortgage sales effectiveness
director for Fifth Third Mortgage. “This likely will be the biggest
investment you make. We think of ourselves not just as mortgage
specialists, but partners in the process.”
Gunn shares five of the biggest mistakes consumers make when
buying homes, and tips to avoid them.
1.
Passing up help. There are more
than 200 federal, state and local programs to assist consumers to
make their down payments or pay their mortgage closing costs. Some
programs are only for first-time homebuyers, others could be for
veterans. Fifth Third offers its Down Payment Assistance Program,
but its mortgage originators also have the ability to search a
database of the more than 200 programs to find which work best and
which can be combined with Fifth Third’s program to save consumers
the most money.
Tip: Make sure to research programs
in your region. The easiest way to see if you qualify: Work with
your Fifth Third mortgage loan originator to see which programs
work for you. “It’s hard to research and navigate programs alone,”
Gunn said. “They vary from city to city, and might only be
available during certain times of the year. We help you so you
don’t leave any money on the table.”
2.
Believing you make too much money to
qualify. Some buyers think assistance programs are only for
low-income households. Some programs assist first-time homebuyers
no matter their income levels depending on where they purchase a
home.
Tip: Look at programs, such as
Fifth Third’s Community Reinvestment Mortgage Special which helps
pay closing costs on homes purchased in designated low-income areas
with loans financed through Fifth Third Mortgage, no matter the
consumer’s income.*** It cannot be combined with Fifth Third’s Down
Payment Assistance Program.
“I didn’t think I could afford a house,” said Gustavo
Benedetti, a high school Spanish teacher in Cincinnati. He recently
used the Community Reinvestment Mortgage Special to buy his
three-bedroom home. “But Fifth Third paid my closing costs, and
made sure I have payments I can afford each month.”
3.
Thinking you don’t have enough money
for a down payment. Fifth Third’s Down Payment Assistance
Program works with the Freddie Mac Home Possible Advantage Mortgage
allowing homebuyers to put down 3 percent. This will allow the
majority of borrowers to enter this program with no cash out of
pocket for the down payment.
Tip: Work with your mortgage loan
originator at Fifth Third to see which programs can help you
qualify. “People tell us they can’t afford a house because of the
down payment,” Gunn said. “It’s the most common barrier to buying a
home. But we find that a buyer needs less money than she thinks to
get into a home with a monthly payment that meets her budget.”
4.
Clinging to outdated ideas on closing
timelines. Closing times are lengthening. And that can be a
good thing. The Know Before You Owe rule enacted by the Consumer
Financial Protection Bureau went into effect, and has extended the
timeline on most home closings. The rule created documents that
detail how much a buyer will pay for closing costs, how much each
monthly payment will be, and how payments or rates could
potentially adjust. Any change to these terms must be given to
borrowers with three days to review, which is different from the
past when changes could be made to the loan before and during
closing without a wait.
Tip: “Be patient,” Gunn said. “And
know that all of the changes are made to help you better understand
the mortgage terms and help you find the best loan for you.”
5.
Relying on a one-size- fits-all
loan. Many homebuyers likely had a 30-year-loan on their last
house. But it’s not the default loan anymore. For each purchase,
loan originators look at the buyer’s financial situation and goals,
and might suggest a loan with a shorter term.
Tip: Work through the financials on
several options with your loan originator to see what puts you in
the best financial position to meet your family’s goals. “It might
be better to get a lower term loan now to build equity, and then
move into something bigger in a few years,” Gunn said. “We want
what is right for you.”
*To be eligible for the down payment assistance of 3%, up to
$3,600, the property must be in one of the following eligible
states: MI, IN, IL, KY, TN, OH, WV, NC, GA, FL and either located
in a Low Income Census Tract or borrower must meet the low income
limit threshold based on the qualifying income per FFIEC website.
Down payment assistance may be taxable as income and reported to
the IRS. Consult your tax advisor.
**Home Possible Advantage is a service mark of Freddie Mac.
***Application fee may be collected during the mortgage process
but will be credited back on the day of closing. Property must be
in one of the following eligible states: MI, IN, IL, MO, KY, TN,
OH, PA, WV, NC, GA, FL and located in a Low Income Census
Tract.
Loans subject to credit review and approval. Prices and programs
subject to change without notice. Fifth Third Mortgage Company,
5001 Kingsley Drive, Cincinnati, Ohio 45227, an Illinois
Residential Mortgage Licensee. Fifth Third Mortgage Company d/b/a
Fifth Third Mortgage Company Incorporated and licensed by the New
Hampshire Banking Department. Fifth Third Mortgage is the
trade name used by Fifth Third Mortgage Company (NMLS #134100) and
Fifth Third Mortgage-MI, LLC (NMLS #447141). Fifth Third Bank,
Member FDIC. Equal Housing Lender.
About Fifth Third
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. The Company has $142 billion in
assets and operates 1,241 full-service Banking Centers, including
95 Bank Mart® locations, most open seven days a week, inside select
grocery stores and over 2,500 ATMs in Ohio, Kentucky, Indiana,
Michigan, Illinois, Florida, Tennessee, West Virginia,
Pennsylvania, Georgia and North Carolina. Fifth Third operates four
main businesses: Commercial Banking, Branch Banking, Consumer
Lending, and Investment Advisors. Fifth Third also has an 18.3%
interest in Vantiv Holding, LLC. Fifth Third is among the largest
money managers in the Midwest and, as of March 31, 2016, had $303
billion in assets under care, of which it managed $26 billion for
individuals, corporations and not-for-profit organizations.
Investor information and press releases can be viewed at
www.53.com. Fifth Third’s common stock is traded on the Nasdaq®
Global Select Market under the symbol “FITB.” Fifth Third Bank was
established in 1858. Member FDIC, Equal Housing Lender
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version on businesswire.com: http://www.businesswire.com/news/home/20160705005321/en/
Fifth Third BancorpLaura Trujillo,
513-534-4361Laura.trujillo@53.com
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