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Affording a house

Hi. Had a quick question on home buying. So my wife and I got ourselves into a pickle. Its not one that causes a financial burden or anything like that, but one that at the moment is annoying and kind of gets you down. We overpaid in early 2007 for our brand new home. Its a lovely home, but we paid 560 for it and its probably worth 460 if we're lucky. The issue is this was our first new home (we are both in our mid 30's now) and its not for us anymore. We would like some more land, even a smaller house to get some privacy. We bring in about 275K in income per year. Should we be able to afford and get approved (mid 700 scores on both of us) for someting in the mid 700's? The real question is this. I may have to pay to sell my house, which will eat into our down payment money. Can you buy a house in the mid 700's with a 10% downpayment? We are wondering if we just have to stay where we are at for another 5 years while we save up for the full 20% , plus however much we have to bring to closing to sell our current house. Any opinions are welcome and appreciated. by soleblazer487 from Perkasie, Pennsylvania. Apr 8th 2014 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,683 contributions

In Bucks county, the maximum conventional loan limit is $417K. anything above that would be considered Jumbo.. Jumbo loans will typically require you to have 20% down, and they also require you have cash reserves, typically enough to cover 6 to 12 months mortgage payments.. being $100K underwater, your going to have to wait till you can either sell your existing home, or enough cash to buy it down so you can sell it now and still have 20% for down payment.. There are lenders out there that will allow for less than 20% down, but these types of programs often require 740 to760 mid scores..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. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Apr 8th 2014
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#76 ranked lender in Florida - 2,240 contributions

You will most likely need 20% down payment. Has anyone looked at your situation to see if you can qua;ify holding both mortgages?

Apr 8th 2014
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Hello, you don't need the full 20 percent down to purchase a new home. There are programs with 100 percent financing and . 3.5 percent down. ConventionalLoans are available with a 5 percent down payment. Please give aimee at monumentmortgage a call 610-695-9290 to discuss financing options. Thank you !

Apr 8th 2014
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I am not sure about holding both mortgages...I guess that would mean renting my current home, and I would be taking a loss every month in that situation as the rents wouldnt cover the mortgage. I may just have to save my pennies so that I can have 20% down...because as stated I would need a jumbo loan. What do most people that buy houses in the 600-800k range do? Do they all pay cash? I dont think houses in those ranges are uncommon at all, I see tons of them. They can't all be cash buyers, right?

Apr 8th 2014
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Barb Lanis (BarbLanis)
#70 ranked lender in Illinois - 663 contributions

Jumbo loans with 10% down DO exist. However, you will need to dispose (sell) the current property and come out of pocket to do so, as you mention. Your options for a Jumbo loan become even better if you can swing a 15% down payment.

Apr 8th 2014
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Dan Avanzato (NorstarMortgage)
#78 ranked lender in Pennsylvania - 1 contribution

Hi, we offer 90% Jumbo financing in your area. Feel free to contact me with additional questions or to see if you qualify for the program.

Apr 9th 2014
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Pete Bass (PeteBass)
#31 ranked lender in Connecticut - 476 contributions

Yes, there are lenders that offer a 10% down payment on a Jumbo loan- You will have to sell your current property prior to, or concurrently, with your new purchase.Contact your local community bank or a lender here on lender411 that can assistyou.

Apr 9th 2014
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Lee Hopkins (LHopkins)
#37 ranked lender in Pennsylvania - 24 contributions

Depending on your lender yes. 90% financing is available now. Mike

Apr 9th 2014
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IRIS CRESPO (icrespo@americanfsb.com)
#96 ranked lender in Pennsylvania - 16 contributions

If you're planning to buy at $700k w/ a 10% down payment = $630k loan = $2750 rough payment, figure in Tax/Ins (escrows) separately. Debt ratio cut off is normally 43-45% = In your case, based on a income of $275k annually your total debt load reporting on credit plus your new payment couldn't exceed $9850. Rental income is typically not used unless you have a history of receiving rental income. I am able to finance jumbos w. 10% down min on primary or second home purchases with no mortgage insurance for qualified borrows. Sometimes you can do as little as 5% down- depending on the program used. If you plan on staying in the current home I would advise restructuring the mortgage to get on the lowest payment possible, assisting you in saving the nest egg needed for your next purchase. I'm in West Chester PA, American Federal Savings Bank we lend in all states. Iris C 484-881-3260

Apr 9th 2014
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