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.
“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.
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1.
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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.
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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.”
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2.
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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.
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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.
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“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.”
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3.
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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.
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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.”
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4.
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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.
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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.”
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5.
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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.
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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.”
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*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
Fifth Third Bancorp
Laura Trujillo, 513-534-4361
Laura.trujillo@53.com