Buying A Home
NamasteBiotches
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Conventional loans with less than 20% down?
Visiting from TB..
We're under contract to sell our first home & are now looking around for a new one.
Our realtor keeps pressing anti-FHA due to being stuck with PMI for the whole 30 years & to try our hardest to get a conventional loan.
Thing is, majority of the banks I'm looking at only go conventional with 20% down. We just won't have that. 10% the most is doable.
Does anyone have any leads on banks that do conventional loans with less than 20% down?
& if so, do they require stellar credit, that's how I'm thinking they would allow that.
Re: Conventional loans with less than 20% down?
We did a conventional loan because there was less strings attached. We did do 20% down. But my SIL did 15% down and did a conventional loan. They will have PMI until they have 20% equity.
I would look at a credit union. Go in a talk with one of their loan officers.
Just because the FHA has a lifetime PMI requirement doesn't mean you have to keep the FHA loan for 30 yrs. Maybe you change jobs and move in five years? Or decided to buy another house?
Even if neither of those happen, you could always re-finance the mortgage to a conventional load when you pay off 20% of the assessed value of the house. At that point you not longer have the PMI or the FHA loan.
I work for a local bank up here in Alaska and we do conventional mortgages all the time with less than 20% down. We do this by putting Private Mortgage Insurance premiums into your regular monthly mortgage payment. It is recommended to stay away from FHA loans if you can because, as someone stated above, you are forced to pay your Mortgage Insurance premiums through the life of the loan.
And yes, you can refinance the loan to get out of mortgage insurance BUT than you are facing another set of closing costs (generally we state about $5,000-$7,000 on the high side) that you will either have to pay or get rolled into your loan.
Basically, if you can stay away from FHA please do so. FHA does allow for lower credit borrowers to still buy a home which is great for those! But if you find yourself with a decent score and at least a 5% down payment, go conventional using Private Mortgage Insurance.
http://money.cnn.com/2013/11/05/real_estate/down-payment-mortgages/index.html
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