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Zillow Home Loans Offers a 1% Down Payment Option, Opening Homeownership to More Borrowers

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This program can reduce the time needed to save for a down payment and provide another option for those who are otherwise ready to take on a mortgage payment

Seattle, WA – Aug. 24, 2023 (PRNewswire) Zillow Home Loans announced its 1% Down Payment program to allow eligible home buyers to pay as little as 1% down on their next home purchase. This program is initially being offered on properties located in Arizona, with plans to expand to additional markets. With the 1% Down Payment program, borrowers who qualify can now save just 1% to cover their portion of the down payment and Zillow Home Loans will contribute an additional 2% at closing. The 1% Down Payment program can reduce the time eligible home buyers need to save and open homeownership to those who are otherwise ready to take on a mortgage.

Zillow Home Loans logo, April 2019 (PRNewsfoto/Zillow Group)

Most markets are in the midst of an affordability crisis, and saving for a down payment remains one of the biggest barriers for many potential home buyers. This is especially true for first-time buyers, who are often paying high rents. Typical asking rent nationwide is $2,062, or 3.6% higher than one year ago and up 31% since the start of the pandemic. (The typical rent in the U.S. in February 2020 was $1,597.)  The combination of record-breaking home price appreciation and rising interest rates means a majority of first-time buyers (64%) are putting down less than 20%, and one-quarter of first-time buyers are putting down 5% or less.  

Zillow Home Loans’ 1% Down Payment program lowers the down payment barrier and increases access to the housing market for eligible borrowers. An analysis by Zillow Home Loans’ shows that by reducing the down payment burden to 1% of the purchase price, a home buyer looking to purchase a $275,000 home in Phoenix, Arizona, who makes 80% of their area’s median income and saves 5% of their income would need only 11 months  to save for the down payment. By comparison, the same buyer who needed to save 3% of the purchase price would require two and half years (31 months) to save that amount.

“For those who can afford higher rent payments but have been held back by the upfront costs associated with homeownership, down payment assistance can help to lower the barrier to entry and make the dream of owning a home a reality,” said Zillow Home Loans’ senior macroeconomist Orphe Divounguy. “The rapid rise in rents and home values means many renters who are already paying high monthly housing costs may not have enough saved up for a large down payment, and these types of programs are welcome innovations in lowering the potential barriers to homeownership for those who qualify.”

Home buyers looking to purchase in the next year should take steps to research and prepare for getting a mortgage as they start on their home-financing journey. Among those steps:

  1. Understand your credit profile: Credit scores are key to getting approved for a mortgage, but for many home buyers, understanding credit is complex.
  2. Improve your credit score: Once buyers familiarize themselves with what’s in their credit report, they can take steps to pay down existing debts, pay bills on time, and review their credit report and dispute possible errors. 
  3. Avoid closing accounts: Don’t close an account to remove it from your report. Those accounts aren’t automatically removed and will continue to show up on your report.
  4. Hold off on financing large new purchases: Wait to make purchases that need to be financed, such as a car, until after you close on a home. This type of purchase will impact your debt-to-income ratio, which will negatively affect the amount of home loan you qualify for.
  5. Determine what affordability looks like: Once buyers have a good understanding of their credit report and their credit score is at least 620 (generally the lowest score accepted by mortgage lenders) it’s time to understand how much home they can afford. Use Zillow’s mortgage affordability calculator to customize payment details.

Zillow Home Loans’ 1% Down Payment program is currently available to eligible borrowers in Arizona, with plans to expand. Through the 1% Down Payment program, Zillow Home Loans will pay 2% of the down payment for eligible borrowers. The 2% is paid through closing and not as a payment to the borrower. Interested applicants should call 1-833-372-1449 to speak with a Zillow Home Loans representative to learn more about the program and determine if it’s the right fit for their circumstances. 

About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life’s next chapter. As the most visited real estate website in the United States, Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting, or financing with transparency and ease. 

Zillow Group’s affiliates and subsidiaries include Zillow®; Zillow Premier Agent®; Zillow Home Loans™; Trulia®; Out East®; StreetEasy®; HotPads®; and ShowingTime+™, which houses ShowingTime®, Bridge Interactive®, and dotloop®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). 

SOURCE Zillow Home Loans

Fannie Mae Announces Nineteenth Sale of Reperforming Loans

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Washington, D.C. – March 9, 2021 (PRNewswire) — Fannie Mae (OTCQB: FNMA) today began marketing its nineteenth sale of reperforming loans as part of the company’s ongoing effort to reduce the size of its retained mortgage portfolio.

The sale consists of nearly 25,000 loans with an unpaid principal balance of approximately $3.5 billion, and is available for purchase by qualified bidders. Interested bidders can register on the Whole Loans Sales page.

This sale of reperforming loans is being marketed in collaboration with Citigroup Global Markets, Inc. Bids are due on March 30, 2021.

Reperforming loans are loans that were previously delinquent but have reperformed for a period of time. The terms of Fannie Mae’s reperforming loan sale require the buyer to offer loss mitigation options designed to be sustainable to any borrower who may re-default within five years following the closing of the reperforming loan sale. In addition, buyers must report on loss mitigation outcomes. Any reporting requirements cease once a loan has been current for twelve consecutive months after the closing of the reperforming loan sale.

Interested bidders can register for ongoing announcements, training, and other information here. Fannie Mae will also post information about specific pools available for purchase on that page.

SOURCE: Fannie Mae

LendingTree Reveals the Cities Where Borrowers Save the Most by Shopping Around for Mortgage Loans

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LendingTree study analyzes the savings available by comparing mortgage rates across the country

Charlotte, NC – N.C., Oct. 17, 2018 (PRNewswire) LendingTree®, the nation’s leading online loan marketplace, today released its report on where borrowers can save the most by shopping around for mortgage loans.

Lendingtree Logo

As interest rates rise, the amount of money consumers can save by shopping around and comparing offers can change. To help consumers understand how much they can save, LendingTree created a Mortgage Rate Competition Index that measures the basis point spread between high and low APRs offered to users through the LendingTree marketplace. This report uses that index to analyze the rate difference and dollar savings for the 50 largest metropolitan areas in the United States. Analysts review the same rate difference and savings on a national basis in the weekly Mortgage Rate Competition Index.

“If you are shopping for a home in San Francisco, taking the first mortgage offer you receive and not comparing it could cost you nearly $100,000 in interest over the life of your loan,” said Tendayi Kapfidze, Chief Economist at LendingTree. “In Cincinnati, it could cost you nearly $24,000. LendingTree, the nation’s leading online loan marketplace, allows consumers to shop around and compare mortgage offers, potentially saving them thousands of dollars.”

Key findings:

  • Homebuyers in Cincinnati and Houston had the biggest potential rate savings by comparing competing offers. Rates in Cincinnati had a range of 64 basis points, followed by Houston at 61, then San Antonio, Dallas, Phoenix and Chicago at 58.
  • Comparing mortgage offers before buying saved the most money in California. Large loan sizes fuel lifetime savings of $99,544 in San Francisco, $75,330 in San Diego and $72,557 in Los Angeles.
  • Significant savings for purchase borrowers in every city. The index ranges from 42 basis points in New Orleans to 64 in Cincinnati.
  • Monthly savings up to $279. For borrowers in San Francisco, a spread of 51 points translates into $279 a month, given the median home price of $900,000.
  • Even less expensive cities register meaningful savings. In Detroit, a low median home price of $150,000 and narrow spread of 45 points still adds up to $14,729 in lifetime interest savings.
  • Individual borrower results will vary. LendingTree’s method uses median values, so half of borrowers would see smaller savings. But, just as important, half could see larger savings. There is no way for a borrower to know where they fall in this spectrum without shopping around, so it is imperative to compare offers.

Where purchase borrowers face the largest differences in mortgage rates

Cincinnati
Purchase Mortgage Rate Competition Index: 0.64
With a median home price of $169,100, borrowers here could save $67 in monthly payments, adding up to $798 a year. Lifetime interest savings would be $23,672.

Houston
Purchase Mortgage Rate Competition Index: 0.61
With a median home price of $233,900, borrowers here could save $88 in monthly payments, adding up to $1,053 a year. Lifetime interest savings would be $31,217.

San Antonio
Purchase Mortgage Rate Competition Index: 0.58
With a median home price of $220,700, borrowers here could save $78 in monthly payments, adding up to $941 a year. Lifetime interest savings would be $27,918.

Where purchase borrowers could save the most in lifetime interest expense

San Francisco
Lifetime interest savings: $99,544
An index of 0.51 and median home price of $900,000 adds up to savings of $280 in monthly payments, totaling $3,357 a year.

San Diego
Lifetime interest savings: $75,330
An index of 0.57 and median home price of $607,000 adds up to savings of $212 in monthly payments, totaling $2,540 a year.

Los Angeles
Lifetime interest savings: $72,558
An index of 0.56 and median home price of $595,100 adds up to savings of $204 in monthly payments, totaling $2,447 a year.

Where refinance borrowers face the largest differences in refinance mortgage rates

Bakersfield, Calif.
Refinance Mortgage Rate Competition Index: 0.81
With a median home price of $234,000, borrowers here could save $116 in monthly payments, adding up to $1,389 a year. Lifetime interest savings would be $41,163.

Oklahoma City
Refinance Mortgage Rate Competition Index: 0.72
With a median home price of $158,800, borrowers here could save $70 in monthly payments, adding up to $839 a year. Lifetime interest savings would be $24,893.

Detroit
Refinance Mortgage Rate Competition Index: 0.72
With a median home price of $150,000, borrowers here could save $66 in monthly payments, adding up to $788 a year. Lifetime interest savings would be $23,383.

To view the full report, click here.

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About LendingTree
LendingTree (NASDAQ: TREE) is the nation’s leading online marketplace that connects consumers with the choices they need to be confident in their financial decisions. LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 500 partners in one simple search, and can choose the option that best fits their financial needs. Services include mortgage loans, mortgage refinances, auto loans, personal loans, business loans, student refinances, credit cards and more. Through the My LendingTree platform, consumers receive free credit scores, credit monitoring and recommendations to improve credit health. My LendingTree proactively compares consumers’ credit accounts against offers on our network, and notifies consumers when there is an opportunity to save money. In short, LendingTree’s purpose is to help simplify financial decisions for life’s meaningful moments through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

Media Contact:
press@lendingtree.com