Best of Luck!
The broker or lender you talk to should be able to get you in a program that works.
Make sure the bank does not have the building on a do not fund list.
Altho you will get a better rate with 25% down, most first time buyers would never become homeowners if that were a requirement. Ditto for 20%. Actually, a large percentage of buyers start with 10% down. You will have to pay private mortgage insurance, but that will go away once you have 20% equity, achievable either through additional principal payments or through price appreciation. -Art
The best course of action is to get in contact with a good mortgage lender who is familiar with the local market to answer that question.
I can work with you and help guide you through this process. I can recommend a mortgage lender to help with gaining the answer to this question. Please give me a call at 973.868.4034 or e-mail me at EmilVeltre@aol.com.
I look forward to helping you with this very important transaction.
Have a GREAT day!
Emil Veltre, RPh, MS, CDPE
But let's do the math. Say, you are shopping for something that is going to sell for $550K. You have several choices:
1. Put 3.5% down, get FHA. Well, that means borrowing $531 K and paying 1 - 1.25 % ABOVE the best rate. Your expected monthly principal plus interest, roughly $2,450, at about 4.5 - 4.625%.
2. Put 20% down, get conventional. Well, that means borrowing $440K and paying somewhere between 0.375% - 0.5% ABOVE the best rate. Your expected monthly principal plus interest payment, roughly $2,100, at about 4.00 - 4.125%.
3. Put 25%, get true conventional, reduce your borrowed amount below $417K. Note that Fanny best rate for Condos is 25%, for under $417K. In this case, your payment (principal plus interest) will be $1,890.
So in case 3, you will pay roughly $1,890 vs case 1, in which you will pay $2,450, or a $560 a month difference. It is true, that in case 3, you will need $137K down vs case 3, only $20K.
Do note that unless specifically FHA, MOST banks will not even offer 2!!
But if you ask me, than (1) saving $560 a Month, or $6,700 a year is worth it for $115K in additional downpayment, (2) in a high cost area such as Northern Jersey commuter areas of Manhattan you need more money to play real estate.
I would HIGHLY recommend, that despite what the realtors and mortgagage broker say, not going for 3.5% FHA. It is a mistake that can cost you dearly down the road.
Hope this helps!
I currently have several buyer's in contract and they all range from 10% down to up to 40% down. There is no reason why you wouldn't be able to seek financing for that reason solely outside of determining personal qualifying factors such as your credit history.
If you'd like a recommendation I'm happy to give you the names of the mortgage officers that my buyer's are using.
I hope this helps!