Today I’m highlighting a great program that is unique to Franklin Loan Center. There are a couple of different community lending programs. What does that mean?
A community lending program is geographically limited, which is the main detail that sets it apart from other lending options. There is one program that also has some income limitations. But there is another program with no income limitations, which means that people who make a lot of money can still benefit from these mortgage possibilities.
A lot of times, the geographic limitations are focused around lower-cost areas. We are seeing these pop up in great neighborhoods.
How Does a Community Lending Program Work?
Basically, the way the program works is that the interest rates are significantly lower – up to 1.5 points lower than the market. That’s pretty incredible because not everyone could qualify for that through other types of lending. It also comes with reduced mortgage insurance.
These two factors can result in significant monthly payment savings, which is a big deal right now.
What’s the Catch?
The only trick is the geographical limitations. The only way we know if it’s available for a home you want to buy is by putting in the address and seeing if it matches up with the program.
I think about this in terms of some of the listing agents: it could be a great selling point to advertise that buyers may qualify for better mortgage terms. If buyers know that they might be able to save a bunch of money on interest costs through a community lending program, then it could be a helpful motivation for them to consider the property. It’s easy to plug in the address and see if a home qualifies for the community lending program.
Any time someone is working with us to get a mortgage, we always check the address in this system first to see if it will qualify. If not, then we will move forward to explore other lending options.
Is a Community Lending Program Right for You?
It’s a cool program, but definitely not the right solution for everyone due to the geographical limitations. But we are completing a handful of these lately and seeing significant improvements in the client’s payments and interest costs. The combination of the reduced interest rate and reduced mortgage insurance can result in a savings of hundreds of dollars a month!
At Franklin Loan Center, we are looking for any solution we can find to help people get affordable payments and lower interest rates. Reach out any time for more information about the ways we can help.