Home Buying in 94558>Question Details

serval, Both Buyer and Seller in Napa, CA

FHA alternatives given changes in April 2013? Seeking

Asked by serval, Napa, CA Mon Feb 25, 2013

We are considering buying a house in Napa for $400,000-$500,000. My wife and I both have credit scores at or above 800. Our combined income is about $150,000/year. We have $25,000 saved for a down payment (plus more for 2 months reserves and emergency savings).

Basically, we were planning on using an FHA loan but given the changes to FHA loans beginning in April and June 2013 this is not a good option.

Are 5% conventional loans available in this situation? E.g., 95-5 conventional with PMI.

Are there still second loan / piggyback options? E.g., 80-10-10 or 80-15-5?

Are there other options we should be considering?

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Answers

9
Richard Littlefield’s answer
I am probably a little late to comment on this, but the cost of FHA is pretty high right now. So with that credit score you would do best to go conforming, but if the loan amount is over $417,000 your down payment goes up to %10. So to keep it down to a 5% down and get the best deal, you need a max purchase price of $438,900 or so.
0 votes Thank Flag Link Fri Jun 7, 2013
Thanks so much for the helpful answers and referrals - please keep them coming!

I will contact the referred lenders (and any others with relevant mortgage options) this week.

So far the closest option has been the 95% conventional loan with mortgage insurance (MI) from Bob Wallin (via Don Lemmons). Interesting that the lid there would be $592,250 (well over our price range) but according to Julie Thall (or at least for the options she has) it would be a $417,000 maximum. I need to find out how much the MI would be I suppose, I'll call Mr. Lemmons and anyone else who can offer similar terms if anyone know of such a lender / broker.

Thanks for the referral to Kelly Hagler (321 4535) as well, I'll call that office to find out if they have a viable option.

I'll also call Gary Twitchel (714-342-1664) about the 80-10-10 option with no PMI.

Thanks again and please keep the advice and referrals coming!
0 votes Thank Flag Link Mon Feb 25, 2013
Hi Folks,

Because the lending world is constantly changing, I referred your questions to Don Lemmons of Prospect Mortgage. He's both a lifelong resident of Napa and a loan professional of many years. Below is a restatement of your questions and his response. It is my recommendation that you contact him directly at Prospect Morgage, 707-265-2247,Cell 707-486-7648:

FHA alternatives given changes in April 2013? Seeking
Asked by serval, Napa, CA • A few hours ago
We are considering buying a house in Napa for $400,000-$500,000. My wife and I both have credit scores at or above 800. Our combined income is about $150,000/year. We have $25,000 saved for a down payment (plus more for 2 months reserves and emergency savings).

Basically, we were planning on using an FHA loan but given the changes to FHA loans beginning in April and June 2013 this is not a good option.

( If you are in contract prior to these date then you will get the lower MIP) (After these dates will require the higher MIP

Are 5% conventional loans available in this situation? E.g., 95-5 conventional with PMI.

(We have 95% conforming loans with MI the maximum loan amount is $592,250K for Napa County)

Are there still second loan / piggyback options? E.g., 80-10-10 or 80-15-5?

(No longer available)

Are there other options we should be considering?

(Ether one of the two above will work for you)
0 votes • Share • Follow Question • Flag • Home Buying in 94558

If you have Napa Real Estate questions of any kind, I will pleased to be able to help.
Thanks, Bob.

R.G. (Bob) Wallin
Realtor® SRES, SFR,
Exchange Specialist
DRE#01492251
(707) 337-5279 Cell
(707) 226-1823 Office
Email: bwallin@windermere.com

Windermere Napa Valley Properties
1030 Third St.
Napa CA, 94559
http://www.BobWallinNapaRealEstate.com
http://www.windermere.com
0 votes Thank Flag Link Mon Feb 25, 2013
Sorry the officer is Kelly Hagler 321 4535 with Provident Bank Mortgage in Napa. Al
0 votes Thank Flag Link Mon Feb 25, 2013
A very seasoned bank/loan officer in Napa can answer all your questions with no obligation. Their rates/fees are highly competitive and will give you quick feedback. I will be glad to help with your Napa property search as I have lived here many years and even handle Bank Sales and Short Sales in Napa. Regards Al Sovey 337-0896
0 votes Thank Flag Link Mon Feb 25, 2013
Good for you for being proactive and thinking ahead to the April FHA changes!

There are absolutely conventional loans available! You can put as low as 3% but, however, I recommend 5% down, up to a $417,000 loan amount, with mortgage insurance. In general, if your loan is between $417,001 and $625,500, you will need 10% down, but your monthly mortgage insurance will be lower. The nice thing about conventional mortgage insurance (MI) is that the higher your credit score, and the larger your down payment, you are rewarded with lower monthly MI.

Although it is prudent to have reserves saved, it is not required that you have reserves in order to purchase a home that is $625,500 or less. I say that only because it seems you are both good savers, and I thought that using your reserves as down payment may allow you to consider a loan higher than $417,000.

There are also secone loan / piggy back options available, but those options tend to cap out at 80 / 10. So if your loan is $417,000 or less, then the 5% down plus MI is your best option.

You are on the right track! If you have not currently lender pre-approved, I highly recommend you get pre-approved, prior to looking for homes. It will give you and your Realtor the best opportunity to be taken seriously when making offers.

Good Luck!
Julie Thall
jthall@opesadvisors.com
0 votes Thank Flag Link Mon Feb 25, 2013
Your are correct there are some changes in store for FHA in the near future. Given your situation, it looks like you could qualify for a loan with as little as 3% down. If you want to move further, let me know, I will run some numbers for you. If they make sense, we can consider moving forward. If the numbers don't make sense, we'll wait until the numbers look better.
0 votes Thank Flag Link Mon Feb 25, 2013
Prime Lending (a direct lender) offers 80/10/10 with no PMI. You can call Gary Twitchel (714-342-1664) for information.
Good luck,
0 votes Thank Flag Link Mon Feb 25, 2013
$417k max on 95% conventional.
80-15-5 not yet available.
Must go 80-10-10.

Some lenders offer a 3% down conventional. I do not.
0 votes Thank Flag Link Mon Feb 25, 2013
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