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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 28 October 2023 J O U R N A L GUARANTEED RATE INTRODUCES LOAN FEATURING 1% DOWN PAYMENT OPTION G uaranteed Rate has introduced OneDown, a mortgage loan that features down payment options as low as 1%, as well as an additional 2% contribution towards that down payment (or up to $2,000—whichever is lower). OneDown further offers borrowers a $1,000 contribution toward lender fees. OneDown is available for real estate transactions involving single-family residences, including condominiums. The program is especially intended for first-time borrowers or homebuyers with an AMI (Area Median Income) under 80%. No geographic restrictions apply. "OneDown is Guaranteed Rate's re- sponse to the ongoing effect of stubborn inflation and higher interest rates," said Kate Amor, SVP and Head of Enterprise Products for Guaranteed Rate. "We want to not only make homeownership less intimidating but make it possible for more families by offering downpayment options as low as 1%." According to a re- cent study covered by the New York Post, only 53% of Americans are confident in their ability to own a home someday. The same study, surprisingly, also found that 40% of those surveyed felt that hitting a jackpot is their best chance to be able to afford homeownership, By removing the need for a big lump sum in the form of a downpay- ment, Guaranteed Rate helps to offer an affordable option to potential buyers that dream of homeownership. Amor also notes that seller-paid temporary buydown options may be available for borrowers, offering addi- tional flexibility through lower rates and payments in the early years of the mortgage. This program also boasts reduced mortgage insurance coverage to help lower payments and can be com- bined with community second programs for additional assistance for eligible borrowers. Industry Update CARRINGTON MORTGAGE SERVICES OFFERS 40-YEAR LOANS AND TEMPORARY BUYDOWNS C arrington Mortgage Services, LLC (CMS), a privately held nonbank lender, offers a variety of loan offerings and services direct to con- sumers, investors, mortgage brokers and mortgage bankers nationwide. To improve affordability for homebuyers, CMS has expanded its offerings to include 40-year loans and temporary buydowns. Rising interest rates, decades-long home price appreciation, and the tighten- ing of credit availability have all combined to create a perfect storm of challenges to potential homebuyers—especially first- time homebuyers, buyers with challenged credit, and those with nontraditional income. With both a 40-year loan product and a temporary buydown program, Car- rington provides solutions to offer greater affordability and availability for prospec- tive homebuyers. Although not available for conven- tional and government loans, the 40-year loan, a sensible option in recognition of prevailing homebuying trends, is available for all CMS non-QM products: Carrington Flexible Advantage, Carrington Flexible Advantage Plus, Carrington Prime Advan- tage, and Carrington Investor Advantage. The 40-year term is available for purchase transactions, as well as refinance trans- actions. For now, the 40-year term is only available on fixed-rate products, but Car- rington plans to offer the extended term as an option for adjustable-rate products as soon as possible. "Instead of the principal and interest payment being based on a 30-year term, the 40-year loan adds an additional 10 years to the term of the loan, taking the monthly payment down and improving affordability for homebuyers who need that longer term," said Greg Austin, EVP, Mortgage Lending for CMS. "We're able to qualify borrowers on the lower