Looking for New Home Close to No Money Down

[smallfry]

Cost of new home 165K. Brand new construction. Income 100K all on 1040's. Same place of employ for 40 years. All 3 FICO scores over 780. Not much cash to show lender as a reserve but it is available through documentation. Can I get a mortgage for around 150K at around 5% today for what will be considered a secondary home since I do not plan on using it for anything more than a vacation home for the next 3 years? I plan on working up North for another few years then I will move into the house on a fulltime basis. Debt to income is close to 0. I have no debts other than normal monthly expenses like car insurance TV phone and the like in my current apt. 

[ShanetheMortgageMan]

Not much cash to show lender as a reserve but it is available through documentation. 

I don't quite follow, when you "show" a lender you have reserves, you do that by documentation, so it sounds like you would have reserves.

Also when buying a second home with less than 20% down, you have to obtain private mortgage insurance, and just recently mortgage insurance companies starting insuring second homes in non-distressed markets, to 90%.  So if you have an extra 5% to put down that'd solve it.  2 months housing payment in reserves, 720 score & no more than a 45% debt ratio is also required (some require 760 score & 41% debt ratio).

Debt would consist of your current rent & the new housing payment.  On $165k with 10% down, payment probably won't be more than $1,250/mo, assuming a 2% tax rate.  Assuming that payment, and $100k/year of qualifying income, as long as your rent isn't more than $2,500/mo your debt ratio would be no more than 44.954%.

[smallfry]

Thanks Shane. The reserves are not in what you might say is a typical investment but I can document that I own the assets.

[ShanetheMortgageMan]

Welcome.  Sounds mysterious, well ultimately when the assets get reviewed by the loan officer it'll be deemed if they can qualify or not.