Zhch, Home Buyer in 95051

Is it possible to get a loan up to 729K with 15% downpayment now?

Asked by Zhch, 95051 Thu Apr 30, 2009

I have excellent credit scores, no debt, DTI < 30%. Thanks!

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Hi Zhch, one more point I forgot to mention:

Fannie Mae and Freddie Mac recently issued loan underwriting criteria and will start buying loans of up to $729,750 from lenders on May 4, which some industry analysts believe will result in lower rates. It will have to be seen whether this in fact will narrow the interest rate gap between the conforming and jumbo-sized loans. Historically, and until July 2007, the spread or difference between conforming mortgage rates and jumbo rates moved within a narrow range of about 0.20%. Today, this is at 1.47%. This will be the "index" to watch to see if the new purchasing has a positive effect. Stay tuned... -Steve
0 votes Thank Flag Link Thu Apr 30, 2009
Zhch-
You are hitting the nail right on the head here. Yes, you should be able to qualify for a loan with 15% down. 10% down would be difficult because pretty much all of California is in a declining market and would therefore suffer a 5% reduction to the max 90% financing that the Conforming Jumbo allows.

As long as the Mortgage Insurance company will accept the file, you should be fine. I just recently did a very similar file in New York City and had the same issue. The file was accepted and is moving along smoothly.

If you would like, we also have a Tax Advantage Mortgage Insurance that will bump your interest rate by .5% instead of charging a monthly fee, thereby reducing your monthly payment.

If you have any questions about qualifying, please feel free to contact me.
Luke Allison
Bank of America Home Loans
828-777-8828
luke.allison@bankofamerica.com
0 votes Thank Flag Link Thu Apr 30, 2009
Hi Zhch,

YES, I just spoke with my Lender, they can give you a loan UPTO 729K with anything from 10% down or more....Please do contact me 408-7773823, will be happy to speak with you and get you in touch with my Lender.
Have a good day,
Nina Daruwalla
0 votes Thank Flag Link Thu Apr 30, 2009
Zhch, my information comes from rates sheets I checked today before responding. Right now, there are functionally only two conforming "conventional" loan amounts:

“Classic” Conforming Conventional to 417K
High Balance/Jumbo Conforming Conventional to $729K (max subject to state/county)

You can check these different levels here (enter state/county):
https://entp.hud.gov/idapp/html/hicostlook.cfm

Even though the government redefined "conforming", that's not to say that the higher levels have been welcomed with open arms by lenders, primarily because Mortgage Backed Securities investors are not particularly fond of them. There are a number of reasons that will keep the interest rate spread between the "classical conforming" and "jumbo conforming" rates:

1) The government is only guaranteeing the base 417K conforming loan limits, so investors of mortgage-backed securities (MBS) are focusing their dollars there. As a shell-shocked" investor worried about stability you are going to stick with a guaranteed investment - especially with the economy in its current state and unemployment on the rise (unemployed people stop making mortgage payments).

2) The FED purchases of MBS is focusing on the base conforming levels, specifically 4.0% & 4.5% MBS Coupon bonds. This helps to keep the interest rates low for conforming loans.

3) With weak demand by investors for non-guaranteed Jumbo MBS, interest rates must be higher to attract investors.

For these three primary reasons (FED guarantee, FED purchase focus, elevated risk vs. reward pricing for jumbos) I really don't see "conforming jumbo" pricing improving significantly throughout 2009, even though the Gov has redefined conforming.

You may want to review these two docs to get a better feel for how mortgage rates are determined:
http://docs.Steven-Anthony.com/SAR-HowMortgageRatesAreDeterm…
http://docs.Steven-Anthony.com/RateShopping-DoItRight.pdf

Best, Steve
0 votes Thank Flag Link Thu Apr 30, 2009
I've asked several banks. Some require at least 20% down for loans over 417K. Some require at least 15% down for loans over 417K but below 625K. I haven't got confirmation from any banks saying they can do loans over 625K but below 729K with 15% down yet. I am talking about conventional loans only here.
0 votes Thank Flag Link Thu Apr 30, 2009
Hi Zhch, Yes and Yes:

Yes, on "Conforming Jumbo" to $729,750 with a credit score of at least 720.

Yes, on "FHA" to $729,750 with a credit score of at least 620.

Personally, I think the FHA loan is a better hedge against downward market-based equity loss, depending on the area you will be buying in.

If you are serious about buying get Pre-Approved. There is a difference between a Pre-Qualification and Pre-Approval. If you are looking for accuracy void of surprises you want to be Pre-Approved first. For the differences see: http://www.Steven-Anthony.com/default.aspx?pp=39377

Via the Pre-Approval process you will know exactly what you can "technically" afford based on current interest rates. More importantly, the Pre-Approval makes you aware of any issues that will prevent you from buying when you want to.

Best, Steve
0 votes Thank Flag Link Thu Apr 30, 2009
Yes it is. There is no problem with as little as 10% down on a Conventional Loan, or 3.5% down with FHA Loans. Any competent Mortage Broker can help you with this.
Bill
0 votes Thank Flag Link Thu Apr 30, 2009
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