New Mortgage Rewards Those Who Take The Bus
Seattle Times Staff Reporter
Conventional advice from mortgage lenders has homebuyers, particularly first timers, avoiding hefty car payments until thev're landed a mortgage, the thinking being that the lower their debt, the pricier the house they can buy.
Now, thanks to an innovative mortgage program getting its national rollout in Seattle, there's a twist: Consider not owning a car at all and be rewarded with a handsome deal.
The deal is called the Location Efficient Mortgage. To encourage buyers within the Seattle city limits to use public transportation, it calculates the expected savings of going carless and applies them to increase buying power.
And it sweetens the deal by throwing in a discounted annual bus pass.
Offered by Seattle-based Continental Savings Bank in conjunction with Fannie Mae, the nation's largest source of home mortgages, the program aims to boost both home ownership within Seattle - which is lower than the national average - and the use of mass transit.
That's why the city of Seattle has added its support to the program. "As Seattle's housing prices escalate, we need to be creative to encourage affordability," Mayor Paul Schell said in a prepared statement. "The city's involvement with our private partners to create this innovative partnership represents our continued commitment to housing and mass transit."
The program was planned before the passage of I-695, which is expected to cause various cuts in transit service.
The savings available with a Location Efficient Mortgage vary according to a number of factors including household size and income, the number of cars in the borrower's household and miles driven per year, access to public transit and neighborhood density.
Take, for example, a family of three, with a household income of $60,000, that wants to buy a house in a particular Ballard neighborhood. With a Location Efficient Mortgage, they could buy a home priced at $160,700. But if they got a standard mortgage, their top price would be only $142,900.
The Location Efficient Mortgage also allows borrowers to make as little as a 3 percent down payment.
Following its initial offering in Seattle, this mortgage will become available in San Francisco, Chicago, Atlanta and Los Angeles County.
For more information call Continental Savings Bank: 206-628-0207 or visit its Web site: http://www.continentalsavings.com
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