Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
First, being that this is a NJ forum, I am guessing the OP is speaking directly to a NJ purchase/mortgage. Second, I am sure there are plenty of "programs" and "offers" out there for less than 20% down -- but they are not very accessible. At 25% down, you apply -- credit, income, assets, you qualify, done deal. Anything less than 20% down -- however you do it -- is going to have terms, conditions, restrictions, etc. I've seen professionals/occupational classes, higher requirements for assets, higher requirements for savings and in cash, collateral-postings (buy a CD), and so on.
Sure, they are out there. Go try and qualify for them. If this is all an effort to save PMI, I think there is a bigger issue here and more important questions to answer. "Swinging" a home purchase on such a tight, very tight budget, leaves very little room for "life" and "stuff" to occur. Personally, I always felt that avoiding PMI, using hybrids, playing games, having zero down/equity, etc. -- was always wrong. We are where we are today because of all that. How little people learn from 2008.
I was offered Wells Fargo loan for 3.75 for 30 year with 10% down and no pmi. Trick is you need the equivalent of six months expense in cash and pre-tax saving (IRA, 401k, etc). They also offered the same deal but a 35 rate if I had the full 20% down plus the 6 months of saving tax/nontax.
Wells offered something similar to me. 3.625% was the going 30 year jumbo rate, but if I opened a WF account and did direct debit they would lower it 25 bips to 3.375%.
First, being that this is a NJ forum, I am guessing the OP is speaking directly to a NJ purchase/mortgage. Second, I am sure there are plenty of "programs" and "offers" out there for less than 20% down -- but they are not very accessible. At 25% down, you apply -- credit, income, assets, you qualify, done deal. Anything less than 20% down -- however you do it -- is going to have terms, conditions, restrictions, etc. I've seen professionals/occupational classes, higher requirements for assets, higher requirements for savings and in cash, collateral-postings (buy a CD), and so on.
Sure, they are out there. Go try and qualify for them. If this is all an effort to save PMI, I think there is a bigger issue here and more important questions to answer. "Swinging" a home purchase on such a tight, very tight budget, leaves very little room for "life" and "stuff" to occur. Personally, I always felt that avoiding PMI, using hybrids, playing games, having zero down/equity, etc. -- was always wrong. We are where we are today because of all that. How little people learn from 2008.
Sigh....the 2008 collapse was so much more than 80-10-10 loans. Try 80/20 (100% financing) negative amortization ARMs that were interest only and the jumped horrifically after their fixed period. Add to the fact many were doing these loans as liar loans. Suddenly, we had pizza delivery guys making 150K a year. That was the recipe that was doomed.
We offer 80-10-10 loans in all 50 states (except Texas). I am with a credit union, which is where most of today's combo loans come from. Credit unions are non profit organizations. Let that sink in for a minute.....no Wall Street, so stockholders, no profit. The bar for these loans is set just a tad higher than other loans due to the responsibilities to other members. Many of these credit unions are easy access, meaning anyone can join. But the real beauty besides the lower fees, are the rates.
We have many programs that allow 5% down to 625K and one for first time buyers with 3% down. The latter has income restrictions, except in designated areas. These buyers are typically very well qualified, many qualifying on just one spouse's income.
Not only are these programs out there, they are available at competitive rates. I would hate for anyone reading her to think they are SOL because the don't have 25% down. Too many remember seeing their retirement shrink along with their equity. Today, it's all about leverage and hanging onto cash....in savings, money market, gold, or mattress.
Question: during the mortgage crisis, the VA loan, which allowed 100% financing, had the fewest foreclosures than FHA and conventional loans. Why did these loans succeed without a downpayment?
First, being that this is a NJ forum, I am guessing the OP is speaking directly to a NJ purchase/mortgage. Second, I am sure there are plenty of "programs" and "offers" out there for less than 20% down -- but they are not very accessible. At 25% down, you apply -- credit, income, assets, you qualify, done deal. Anything less than 20% down -- however you do it -- is going to have terms, conditions, restrictions, etc. I've seen professionals/occupational classes, higher requirements for assets, higher requirements for savings and in cash, collateral-postings (buy a CD), and so on.
Sure, they are out there. Go try and qualify for them. If this is all an effort to save PMI, I think there is a bigger issue here and more important questions to answer. "Swinging" a home purchase on such a tight, very tight budget, leaves very little room for "life" and "stuff" to occur. Personally, I always felt that avoiding PMI, using hybrids, playing games, having zero down/equity, etc. -- was always wrong. We are where we are today because of all that. How little people learn from 2008.
I'm not interested in your opinions about my life or my finances, I don't have any other important questions to answer besides the one i asked. I haven't divulged any information about my finances, and I'm not interested in your opinion about it and no one cares what your opinion about that is either.
I am going to pursue the loan at the best terms, that leads to me to be paying as a little as possible for the house and to borrow the money as cheaply as possible that I am using to purchase it. If you think that is wrong, well.. no one cares.
To everyone else. Thank you for your help, I have had some success finding what I am looking for and am continuing my search as well as keeping in mind( as was mentioned by a posts a few above) that the second mortgage interest rate has to be sufficiently low(in conjunction with being paid off very quickly) for this to make sense. In addition a rate premium that will stay for the life of the loan(versus PMI for only the first few years) will defeat the purpose of this effort.
I'm not interested in your opinions about my life or my finances, I don't have any other important questions to answer besides the one i asked. I haven't divulged any information about my finances, and I'm not interested in your opinion about it and no one cares what your opinion about that is either.
I am going to pursue the loan at the best terms, that leads to me to be paying as a little as possible for the house and to borrow the money as cheaply as possible that I am using to purchase it. If you think that is wrong, well.. no one cares.
To everyone else. Thank you for your help, I have had some success finding what I am looking for and am continuing my search as well as keeping in mind( as was mentioned by a posts a few above) that the second mortgage interest rate has to be sufficiently low(in conjunction with being paid off very quickly) for this to make sense. In addition a rate premium that will stay for the life of the loan(versus PMI for only the first few years) will defeat the purpose of this effort.
My first paragraph spoke to you and your post. My second was on the topic, others' comments vis a vis PMI, and not directed toward you. Take what you like and leave the rest. You don't like it, don't read it.
Sigh....the 2008 collapse was so much more than 80-10-10 loans. Try 80/20 (100% financing) negative amortization ARMs that were interest only and the jumped horrifically after their fixed period. Add to the fact many were doing these loans as liar loans. Suddenly, we had pizza delivery guys making 150K a year. That was the recipe that was doomed.
We offer 80-10-10 loans in all 50 states (except Texas). I am with a credit union, which is where most of today's combo loans come from. Credit unions are non profit organizations. Let that sink in for a minute.....no Wall Street, so stockholders, no profit. The bar for these loans is set just a tad higher than other loans due to the responsibilities to other members. Many of these credit unions are easy access, meaning anyone can join. But the real beauty besides the lower fees, are the rates.
We have many programs that allow 5% down to 625K and one for first time buyers with 3% down. The latter has income restrictions, except in designated areas. These buyers are typically very well qualified, many qualifying on just one spouse's income.
Not only are these programs out there, they are available at competitive rates. I would hate for anyone reading her to think they are SOL because the don't have 25% down. Too many remember seeing their retirement shrink along with their equity. Today, it's all about leverage and hanging onto cash....in savings, money market, gold, or mattress.
Question: during the mortgage crisis, the VA loan, which allowed 100% financing, had the fewest foreclosures than FHA and conventional loans. Why did these loans succeed without a downpayment?
I absolutely agree 08 was about a great deal more than loans -- any type of loans. Without question. Whatever it is you offer -- a tad higher or not -- that's fine. Nonprofit is a tax status, not a management style. Nonprofit or not, an organization is not in to lose money. Buyers certainly don't need 25% down. My point was that at less than 25%, the options today are far fewer than they were in pre-08 -- and there are many reasons for that...and I think some of them are good reasons, valid ones. That's all.
Two options that I wasnt aware of until my last refi, for those mere mortals among us who dont have 100k to put down on a 500k 'starter home' :
1) You can find out about possibility of 'single premium PMI'-- basically, instead of 200-300 a month PMI, you pay a single (large!) premium up front--not sure about possibility of rolling it in to the loan or not. Sometimes its worth the hit, sometimes its an insane amount of money--what if values rise and you decide to refi in 3-5 years?
2) There are lenders out there who will pay your PMI premium for you. In return, you agree to pay a (slightly) higher interest rate (I think its between .25-.5% over prevailing rate).
The risk is, with #2, you are technically paying for that 'pmi premium' the life of the loan, versus standard PMI (not MI on FHA loans--they're different) 'goes away' once you hit a certain LTV ratio (25% equity, I think?). In my case, the difference was between around 3.625% (I pay PMI) and 3.825% (lender paid). I chose the latter.
I am not a banker, but I worked with a great mortgage broker on my last refi and the purchase before that.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.