Rocket Mortgage Introduces 1% Down Payment Option
Rocket Mortgage's recent announcement to allow homebuyers to put down just 1% as a down payment has generated significant buzz within the real estate industry. Known as ONE+, the program allows buyers purchasing a single-family home with an income equal to or less than 80% of their area median income (AMI) to make a down payment of just 1% of the purchase price. Rocket Mortgage will cover the remaining 2% required to meet the conventional loan threshold and will cover the monthly mortgage insurance fee typically associated with down payments below 20%.
To illustrate, a homebuyer purchasing a $250,000 property would only need a down payment of $2,500 instead of the traditional $7,500 (3% down payment). With ONE+, borrowers also benefit from waived mortgage insurance fees, potentially saving up to $245 per month on a $242,500 loan. Over the first seven years after closing, which is the average duration of mortgage insurance payments, homeowners could save as much as $20,500, improving their monthly cash flow.
Rocket Mortgage's decision to allow homebuyers to put down only 1% as a down payment represents a significant leap forward in making homeownership more accessible and affordable. By reducing the financial burden of purchasing a home, the initiative opens doors for a wider demographic, particularly first-time homebuyers. The move also provides greater financial flexibility and the potential to build equity and wealth.