Mortgage Options in MA (loan, interest rate, rate, finance)

[shellbell12]

I live in Massachusetts. I have a question about conforming vs jumbo loans. Suppose I want to buy a $600k house with 20% down. Is there a way to structure a mortgage so as to not have to take outba jumbo mortgage on the entire amount? I can borrow up to $465k and it's still considered conforming and the interest rate is lower. Is there a way to get another mortgage on the other $15k say at a slightly higher rate so that Idont havevto pay the jumbo rate on the entire $480...? Or is it Breyer to just cough up thebextra $15k and put down more than 20% so that I only borrow $465 in order to keep it conforming?

[thomasdavie]

Hi and congrats on your purchase.

Each county sets its own limit for Conforming. Generally $417k (or thereabouts). However , some high areas have a higher threshold for 'conforming' . It all depends on what the average home values are in your county. You have indicated yours is $465,000

Here is a link to see what the limit is in any given county.

Federal Housing Finance Agency - Conforming Loan Limit

As far as the one loan goes, what matters is the 'loan to value' or LTV. Not the entire amount of loans , called 'closed loan to value or CLTV.

Your LTV is the amount you are borrowing on the first mortgage. The CLTV is all mortgages combined. So yes, you can get a small second to keep your first under the threshold.

A novel way to get that second is called a 'seller carryback' , where the seller writes a loan for a certain amount . Here is a good link for you to source information.

Seller Financing compliance and the SAFE Act. final rule, Dodd Frank, and CA SB 36

According to the Dodd Frank bill, seller carry back will now be subject to the same laws that govern formal lenders,but its still legal and valuable tool.

So try to get a small loan from a bank , and if not try to gather up the cash, and if still no, approach the seller with a 5 year seller carry back second.

Hope this helps