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New Contributor
Posts: 83
Registered: ‎04-27-2012
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5% conventional loan possible?

I am very confused, so I would love some help figuring this out. 

I am looking for a duplex in Los Angeles County (owner-occupied, first home).  My credit scores are btwn 780 - 804 (although they may go down a tad as I am in the midst of consolidating my student loans).  I will have between $30,000 - $45,000 for downpayment.  

Is it possible to get a conventional loan with 5% down in the present climate?

 If so, what is the limit for a conventional loan in Los Angeles County? (I am reading both $417K and $625K).  

What is the likely interest rate, and where do I go to search out that type of product?? (e.g. credit union, major bank, broker, etc.)

Thank you!

Valued Contributor
Posts: 2,300
Registered: ‎08-25-2011
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Re: 5% conventional loan possible?

With your scores you can get anything you want lol.

 

5 or 3 percent down. Interest in the 3 percent range.

Established Contributor
Posts: 736
Registered: ‎08-25-2008
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Re: 5% conventional loan possible?

The only bump you may experience will be the investment side of the duplex.  Most want a larger down payment on an investment property so it will be important to find out how different lenders will view the duplex since it is considered a multi-family dwelling.

New Contributor
Posts: 83
Registered: ‎04-27-2012
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Re: 5% conventional loan possible?

I didn't even know that 3% loans were possible still!  

 

So, my remaining questions are: 

 

What would be the lending limits of a conventional loan with 3% or 5% down in Los Angeles County?  ($417K?  $625K? Something else?)

 

What types of lenders typically have this product available?

 

When trying to buy a house, does the seller tend to care whether there is a 3% or 5% downpayment? (or more)

 

Thanks so much!!!

Valued Contributor
Posts: 1,115
Registered: ‎10-31-2011
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Re: 5% conventional loan possible?

Possible ..yes... but you will have to pay PMI

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Valued Contributor
Posts: 2,300
Registered: ‎08-25-2011
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Re: 5% conventional loan possible?

You can go up to 625k. Plus since your going conventional, you can get out of PMI.

 

I would do LPMI and take the upfront fee.

New Contributor
Posts: 83
Registered: ‎04-27-2012
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Re: 5% conventional loan possible?

[ Edited ]

I just spoke with a possible broker, and he gave me some clear guidance on this question -- thought I would share if anyone else is trying to get their heads around the same things.

 

* Re: Conventional loan:

 

- 5% vs. 3% down : both are possible, but 3% down requires substantially higher mortgage insurance

-  Loan limits: Single family limit is $417,00 max with 3-5% downpayment & $625 max with 10% downpayment; duplex is $533,000 max with 20% downpayment; triplex is $689,000.

 

 

 

Valued Contributor
Posts: 2,300
Registered: ‎08-25-2011
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Re: 5% conventional loan possible?

But remember you can do LPMI, ask your broker about it. It will save you a ton with PMI.

New Contributor
Posts: 83
Registered: ‎04-27-2012
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Re: 5% conventional loan possible?

Unfortunately, since we want to get a duplex (unless we just can't find one), we will have to come up with 20% for a conventional.  Looks like FHA is going to be our only option, unless there are any financing mechanisms that still exist that will allow you to finance that remaining 10-15% of a conventional loan.  

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