You’ve done your homework. You know you can afford the mortgage payment and handle the maintenance. The down payment is the last obstacle, but it’s a big one. After all, homes aren’t getting any cheaper. With ONE+ by Rocket Mortgage, you can get into a home with as little as 1% down.1 You’ll also receive a 2% grant from Rocket Mortgage.
In this article, we’ll get into how the program works and who qualifies for this option.
ONE+ Benefits
This loan option has several benefits. Chief among them is the ability to put down as little as 1% and get into a home. Rocket Mortgage is providing a grant of 2% of the loan amount. Under this scenario, you would enter your home with 3% equity. Clients who qualify may contribute up to 3% toward a down payment while still receiving the 2% grant.
This is available for both first-time and repeat home buyers. There are no restrictions on where you can live or where you move from. The program is available nationwide.
In addition to the benefits of the upfront savings, clients won’t pay for mortgage insurance on this product. That means a lower monthly payment, which adds to affordability. But before we go too much further, let’s breakdown the math. We’ll use a $250,000 assumed purchase price. This is a 30-year fixed loan with an interest rate of 6%
- You bring $2,500 for a down payment (.01 × $250,000 = $2,500).
- Rocket Mortgage covers 2% of the loan amount (.02 × $250,000 = $5,000).
- Your monthly principal and interest payment is $1,453.91.
- You could save up to $245 per month by not having to pay for mortgage insurance.
The $6,000 we cover means lower out-of-pocket costs at closing for you. And who wouldn’t like $245 per month back in the budget?
In fact, ordinarily, when you do have to pay mortgage insurance, you can’t request it comes off until you reach 20% equity. It takes an average of 7 years before mortgage insurance is removed from a loan. Based on this, clients would be saving an average of $20,500 over the same period.
Qualifying For ONE+
Because this is a conventional loan product tied to affordable housing goals, there are several requirements you should know about. Here’s a brief rundown:
- You can’t qualify if you make higher than 80% of the median income in the area in which you’re looking to buy. For example, if you live in Macomb County, Michigan the area median income is $90,800. You can’t use more than $72,640 to qualify for this ($90,800 ×.8 = $72,640). You can look up your area’s median income with Fannie Mae’s lookup tool.
- You need a qualifying FICO® Score of 620 or better.
- This is for single-unit primary residences only.
- When combined with our 2% grant, your initial down payment can be no more than 5%.
Although there are income limits, there’s one other important note to make. This is qualifying income. If you can meet debt-to-income ratio (DTI) requirements without using bonus income or putting another borrower on the loan, it doesn’t need to be included in your qualifying income. This could give you some breathing room. Read more.
– Marcus Bruno
Real Estate Broker
Bruno Fine Properties
(281) 969-3817
