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5% down mortgage programs

Hi, I'm interested to see if there are any 5% down mortgage programs out there available for me. My wife and I are looking to purchase a single-family home as our primary residence in Colorado. Both of our credit scores are 780+ and my base salary is $140k. We'd be looking for a home in the $400-$450k range. A couple things that will also need to considered in our qualification:-I changed jobs in June after being at my old job for 8+ years, but am working in the same industry.-We have two other rental properties with mortgages that we've had for 4+ years that are cash flow positive.-We are looking to rent our current condo when we move as opposed to selling it.Are there any non-FHA programs available to us, or will it be necessary for us to wait until we save 20% for a down payment?Thanks,Eric by vandem_677_178 from Denver, Colorado. Sep 3rd 2012 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

5% down is ok for now.. (changes are coming)... but for conventional loans, you cannot finance more than $417K... puts you at a maximum purchase price of $439K... as far as your job and income, you should be fine. The best advice I can give you is to contact a LOCAL mortgage broker, not the local "Big" bank, and certainly not one of those 50 states internet lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Sep 3rd 2012
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Patrick McCarthy (PatrickM)
#22 ranked lender in Ohio - 196 contributions

Eric: Conventional financing only requires 3% minimum down-payment with the scores you have. You will have to qualify with the debt load of the other mortgages. You will only be able to use income from the condo to qualify if you can show it has at least 30% equity (appraisal is needed on the condo to determine this). If you qualify without future income from this property, you should be fine, provided your new loan amount does not exceed $417k as mentioned in the other posts. Feel free to call on me if you have any other questions.

Sep 4th 2012
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Ron Pippin (RonPippin)
#26 ranked lender in Utah - 158 contributions

Eric,Conventional mortgages only require 5% down, so you shoud be fine. You only need 20% down when you don't want mortgage insurance included in your payment. Your job change shouldn't be a big deal especially since you are in the same industry. Since you have had your rental properties for several years, those also should be fine. Really, this isn't as big of a deal as it may sound. You can find me at www.HelpMeWithAMortgage.com or email me at ron@helpmewithamortgage.com. Though I am in Salt Lake, I can still help you in Colorado and provide amazingly fast service. Ron

Sep 3rd 2012
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Mark Schmidt (markallenschmidt)
#47 ranked lender in Colorado - 21 contributions

Eric moving to Colorado. First, good idea to move here. I came here with my family in 1999, best move we ever made. I read the other replies, and they gave you some good answers. About your job, since you stayed in the same field and if you didn't have a gap longer than a month or so, you should be good. You can get a conventional loan with 5% down, but you will have mortgage insurance. If you take out a 15 year the mortgage insurance rate is much lower and it drops off a lot sooner. The thing to consider with your rental properties is how they are figured into your debt to income ratio. (DTI) When you add up your gross income and all the monthly bills, (the minimum payments that are listed on your credit report we take 5% of your outstanding balance as your monthly payment) you need to be around 45%. We look at rental income like this; we credit about 75% of the fair market value of your rental income. If you get $1000 rent on both of your places and the fair market value is $1100, then we would credit about $825 of your rent as income. Lenders want a cushion of savings and some wiggle room in how we consider rents in your (DTI) That could mean that your condo might be counted as a liability if it isn't rented and producing income. About down payments: you can put down 5% - 10% - or 20%, usually the more down the better. You might have heard that it is is difficult to get a mortgage these days, well, It's not some much difficult as it is detailed. It sounds like you are in a good spot. If you want to know more details you can talk to me or another mortgage banker in Colorado. I can also set you up with a service that will keep you posted on all the properties that fit your criteria when they come on the market. It's amazing, you will know what is available before even most of the Realtors know. It's a service I offer at no cost. It's good for you and your family, I wish it was available when I came to Colorado. I hope that gives you some helpful information. Mark 720-206-4539 I work for Cherry Creek Mortgage Company, the best lender in Colorado.

Sep 4th 2012
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Allen Lundberg (ColoLender)
#20 ranked lender in Colorado - 24 contributions

Eric,All of the responses that I have read are good... If you can put down 10% and depeding on the overall debt picture, you may also have the option for a 1st and 2nd mortgage. You would be able to avoid the mortgage insurance if you go this route and you can potentially move the sales price higher. In terms of the mortgage insurance, you have a couple options there too. You can pay monthly or a single premium and then not additional insurance. If I can help with specific numbers, feel free to give me a call 720-203-9871. Thanks in advance, Allen

Sep 4th 2012
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Linda Wintersteen (Linda123)
#62 ranked lender in Arizona - 1,256 contributions

There are programs out there... Email me at yourloanpartnerforlife@live.com.. linda if you are close to central city,, for fun, my uncle restored all the hotels to orginal condition.. or phone me at 602-330-1598

Sep 4th 2012
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Derick Condron (rightstartoregon)
#32 ranked lender in Oregon - 598 contributions

ALl the prior answers are spot on. You will be able to do a 5% down loan as long as you stay at 417 or lower on your loan amount and you can qualify debt to income ratio wise.

Sep 4th 2012
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Susan Andrews (susan@cospringsmortgage.com)
#52 ranked lender in Colorado - 4 contributions

You can qualify for a conventional mortgage with 5% down. However you will have monthly mortgage insurnace until the loan is paid down to 80% of the appraised value at the time of the purchase. There are options to have lender paid MI to reduce the monthly payment. You will need to have 6 months PITI (Principle and Interest, Taxes and Insurance) in liquid assets for all properties you own at the time of your new purchase. Lenders will only allow you to use 75% of your rental income to off set your other mortgages. This means that if your mortgage is $1000 on a rental property and you collect $1350 per month then the amount the lender will allow is $1012.50 as rental income. It sounds like you should be able to qualify for the program, good scores, good income etc. Give me a call if you have any other questions. I would be happy to help out. My office is 719-288-6055 and ask for me -Susan Andrews. My cell is 719-650-2216 and I can be reached here after hours.

Sep 4th 2012
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Thanks for all the wonderful and quick responses.

Sep 4th 2012
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Enter your answer here Hi, Yes, there are 5% down programs with Fannie Mae and Freddie Mac. These loans do require mortgage insurance which can be paid monthly or as an up front lump sum. For a higher interest rate you can also get a lender paid mortgage insurance product at 95% loan to value. Generally mortgage insurance is cheaper than FHA on a 95% loan to value conventional loan. I work for Catalyst Lending which is a great company located in the Denver Tech Center. We are lender paid so we do not charge an origination point and our rates are very competitive. Please call me 303-646-0391 or email me to discuss further mwerner@catalystlending.net. Thanks Meg Werner, Loan Originator

Sep 18th 2012
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Enter your answer here Hi, Yes you sure can get conventional financing with 5% down. You have several options, borrower paid monthly mortgage insurance, borrower paid one time upfront mortgage insurance or lender paid mortgage insurance which has a higher interest rate. I work for Catalyst Lending out of Greenwood Village, CO which is an excellent company. We are lender paid which gives us low closing costs. I would be happy to discuss your options further at any time. I can be reached on 303-646-0391 or by email on mwerner@catalystlending.net. Thanks! Meg Werner

Sep 18th 2012
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Followup question: What 30 year fixed mortgage programs are there for a non-owner occupied SFR if I want to put less than 20% down? Remember, this is NOO.thanks,J

Sep 20th 2012
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