6 APRIL 2017 – Last week, AAFMAA Mortgage Services (AMS) presented its latest webinar, “Low Down Payment Mortgages: Understanding the Costs and Avoiding the Hidden Pitfalls.” Host Anthony Powell, Vice President of Operations of AMS discussed low down payment mortgages and why they are attractive to homebuyers. He also revealed the downfalls of mortgages with high loan-to-value ratio percentages.
A low down payment mortgage is one that requires a down payment of less than 20%. In other words, it is a mortgage with a loan-to-value ratio greater than 80%. For example, since a VA loan requires no down payment, its loan-to-value ratio is 100%.
While it may seem like an advantage to keep as much cash as you can, there are hidden pitfalls to low down payment mortgages. With a VA loan, for instance, there is an upfront financeable fee for first time users. Conventional low down payment mortgages also come with fees.
Watch the recording of Andy’s webinar for more examples of the hidden downsides of low down payment mortgages. You’ll discover that Andy concludes the webinar with helpful advice on how to avoid expensive pitfalls when approaching one of these mortgage loans.
You can find recordings of every AAFMAA webinar on our INTEL Center.