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Even if there is an "other income" buying a home such a small down payment is a bad move especially in this market.
Whether it's smart or not is open to debate, but I think that it's going to be near impossible to get PMI for it, and I'm not optimistic that an u/w will approve a 5/15/80 on a loan that size with that d/p. Especially if the appraisal comes back "declining market."
I think that deal needs 10% down and a co-borrower with income to bring to the table and minimal debt. The other option would be a 40 year term, but even then I still think the 5% down might kill the deal.
I don't see how buying a home with a low down payment is a bad move. People have been buying homes with 3% down using FHA for years. As far as PMI, if the FHA loan limits go up to that level in the OP's county then he has that option. If non-conforming has to be chosen then you are right, he's going to have to find a portfolio lender to find just 5% down.
I don't see how buying a home with a low down payment is a bad move. People have been buying homes with 3% down using FHA for years. As far as PMI, if the FHA loan limits go up to that level in the OP's county then he has that option. If non-conforming has to be chosen then you are right, he's going to have to find a portfolio lender to find just 5% down.
FHA isn't making that loans with those DTI ratios. He'd have to bring a qualifying co-borrower to the table with him. I can't remember FHA's rules on if co-borrowers can be non-occupying or not.
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Quote:
Originally Posted by annerk
FHA isn't making that loans with those DTI ratios. He'd have to bring a qualifying co-borrower to the table with him. I can't remember FHA's rules on if co-borrowers can be non-occupying or not.
With all due respect, without having an application, credit, and running the OP through TOTAL Scorecard I don't see how you can say definitively that he could or could qualify. FHA is insuring loans with 50% DTI ratios, particularly with very strong compensating factors.
Without knowing what state the OP is in, I don't see how you could assume that a lender won't write a 95% Confumbo and that an MI company won't insure it. I don't see how anyone can assume what the property tax and insurance would be (in NV the property tax on a $600,000 home would run around $6000 a year, and insurance would run about $900 a year), and I don't see how anyone can assume that there is not a spousal income in the picture or the opportunity for some serious career advancement. Perhaps the OP has a significant bonus or overtime income that he did not disclose. I personally don't think so, but without full disclosure and all of the details assumptions are pretty pointless.
And yes, FHA does allow occupying and non-occupying co-borrowers. Income, debt, and credit of the non-occupying co-borrower will be considered as if they were and occupying co-borrower.
So OP, my original info is still the most pertinent to your question. 5% down is a possibility if you are in a non-distressed market with conforming loan limits high enough to cover that loan amount.
they are limited and not at as good of rates. also, rates on second loans are not as desirable. I think what you should take from the last three pages is..... yes, it is possible. Not necessarily the easiest scenario (and whether or not someone with income of 100K should buy a house of that expense was not your question even though some chose to voice their opinion).
Call a reputable lender... apply for preapproval. LOs will love to try to find a solution on a loan of your size. Good luck
So OP, my original info is still the most pertinent to your question. 5% down is a possibility if you are in a non-distressed market with conforming loan limits high enough to cover that loan amount.
I don't mean to be obtuse, but with the info he gave us, how would he qualify for this loan? (Yes, I know there may be some other person lurking with some additional income, but unless this additional income is another $100k, this loan should just not be approved.)
So just going on what he asked, are there still people out there who would be dumb enough to approve this loan given what plunged us into this stupid mortgage crisis in the first place?
I don't mean to be rude or anything; I really am just trying to understand.
Just the principle and interest is over $3000 (provided he gets a really low mortgage rate - 5.5%).
I don't see how buying a home with a low down payment is a bad move. People have been buying homes with 3% down using FHA for years.
Because people have being doing X for years does not imply that X is financially good. Buying a home with a low down payment is risky for both the lender and the borrower. What if you need to sell in a few years because a job transfer? If the market has gone down just a little bit you are going to be underwater.
The current market demonstrates nicely why low down payments are no good for either party.
Quote:
Originally Posted by stan4
I don't mean to be obtuse, but with the info he gave us, how would he qualify for this loan? (Yes, I know there may be some other person lurking with some additional income, but unless this additional income is another $100k, this loan should just not be approved.)
A mortgage sales man isn't going to tell you "you can't afford that". If there is at least some possibility that the application could pass they will deal with it and try to make some $$$.
In the case of a FHA loan there is at least some possibility that it could happen. Its just ridiculous that tax dollars are being spent to subsidize people's bad choices... Helping people buy their first starter home is one thing, helping people over extend themselves buying a fancy home is a completely different story.
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