01-11-2013 06:01 PM - edited 01-11-2013 06:02 PM
I'm looking at a house that's on the market for $240,000 but I have only $10,000 or so in cash for a down payment. I can easily afford a 30-year mortgage of $230,000, but would a lender actually lend that much to me with less than a 5% down payment? I have a decent FICO (about 730) and make $90,000 a year. No debt except $15,000 in student loans.
01-11-2013 07:22 PM
How you can go conventional with 3 percent?
I have about 4% saved and my mortgage broker claim that I can do only FHA; even though someone else told me about Conventional with 3%.
I earn bout 130 000; scores are 720+;....
01-11-2013 09:04 PM
Going Conventional is not always a savings. Lenders have tiers for rates. Top tier with most lenders is 740+ for conventional.
There are also guidelines for lower down payments, and could possibly cost you In additional fees and or rates.
01-12-2013 09:10 AM
01-19-2013 08:24 PM
thanks for the info. Would someone explain difference between conventional and FHA mortgages? I'm not real savvy here, as I hadn't expected to be in the market for a house so soon
01-19-2013 09:15 PM
First you have to know there are 2 types of conventional loans.
1- Conforming conventional loans: A conforming loan conforms to the regulations created by Fannie Mae and Freddie Mac. There is plenty of information to find regarding the regulations. Fannie Mae and Freddie Mac have also created the super conforming loan, exclusive to borrowers buying homes in counties with high home values. Also plenty of information can be found regarding this.
2- Nonconforming conventional loans: Borrowers who do not qualify for conforming loans for one reason or another may still aquire a nonconforming loan. Borrowers seek nonconforming loans because of credit requirements, higher loan limits, as examples. They usually have unfavorable interest rates, additional upfront money needed, and mandatory mortgage insurance.
Conventional loans are not guaranteed or insured by the Government. Conventional financing relies heavily on credit scoring for the best rate terms. While conventional loans usually require a 20% down payment to circumvent mortgage insurance, low down payments do exist and will have to pay private mortgage insurance.
FHA loans are insured by the Federal Housing Administration in order to enable lenders to offer consumers better deals such as low down payments, low closing cost, easier credit score qualifying. FHA loans must be provided by an FHA approved lender. FHA allows borrowers with no credit history, and or few credit problems to still qualify to buy a home.
Just a little reminding fact, even though FHA has minimum requirements, lenders have overlay requirements. Overlay requirements are for just about any loan program available. Example of an overlay requirement would be a higher credit score to qualify.
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