Centra Blog

Increasing your Financial IQ

Mortgage matters: low down payments

dad measuring daughters height

Whether you’re considering buying your first home or refinancing your dream home, chances are you have questions. Understanding your mortgage options will help you pick the mortgage that best fits your needs. To help with initial costs like down payments and closing costs:

$0 Closing Cost Mortgage¹

A $0 Closing Cost Mortgage can save you thousands of dollars on the initial cost of your mortgage. This can be a huge help if you’re looking to buy your first home and need to save your cash for a down payment. It’s also a good option if you’re looking to refinance and lower your monthly payment without going through the expense of closing costs again. Keep in mind, with a $0 Closing Cost Mortgage, you may end up paying a slightly higher interest rate throughout the life of the loan. Some lenders will also have restrictions on which mortgage terms are available with this option.

Low Down Payment Mortgage²

Coming up with a down payment for your first home is a tall order. It’s hard to save up 20%, 10%, or even 5% of a home’s purchase price when you’re also paying rent every month. With Centra, you can choose this mortgage option to buy your home and finance up to 97% of the purchase price. Keep in mind, when you borrow more than 80% of a home’s purchase price, you’ll need to pay for Private Mortgage Insurance (PMI). This is an insurance policy that protects the lender if you’re unable to make your payments. It typically costs $30-$70 per month for every $100,000 borrowed. You will no longer be required to carry PMI once you have paid 20% of your home’s cost.

While it may cost you a little more to get in your home sooner, you also need to consider the value of owning your home versus renting one. While PMI or a slightly higher Annual Percentage Rate (APR) might mean you’ll pay less toward owning your home, you’re still building equity. If you continue renting, your monthly rent payment does not get you any closer to owning your home.

Ready to get started?

1. $0 Closing Cost option applies to Adjustable Rate Mortgages (ARMs), 10-Year Fixed Rate, and 15-Year Fixed Rate Mortgages only. Not valid with 20-Year Fixed and 30-Year Fixed Rate Mortgages. May be applied to new purchase or refinanced mortgage. $75,000 minimum initial loan amount required. Higher rates than posted on Centra website will apply with $0 Closing Cost option. Additional closing funds may apply if escrow and/or prepaid interest are required. All loans are subject to credit approval. Offer is subject to change without notice and is only available on owner occupied residential first mortgage loans with loan-to-value of 90% or less.
2. 97% financing option requires a down payment of 3% of the property’s purchase price. 97% financing option applies only to 5/1, 7/1, and 10/1 Adjustable Rate Mortgages (ARMs), 10-year Fixed Rate Mortgages and 15-year Fixed Rate Mortgages. Available on new purchases only. Higher rates than posted on the Centra Website will apply with 97% financing option. All loans are subject to credit approval. Offer is subject to change at any time and is only available on owner occupied single family first mortgage loans. Offer may be limited to select housing types. Offer cannot be combined with $0 Closing Costs Option.