Home Buying in 60640>Question Details

Bird, Home Buyer in 60606

Monthly payments with low down

Asked by Bird, 60606 Fri Sep 28, 2012

I want to put an offer on a condo at around 330-350k. I have great credit and am pre-approved for up to 400k but as a first time buyer I don't have a huge savings pot. I can comfortably put 10k down as I want to keep a reserve for anything that crops up in the first 12 months after moving. I'm hearing different things about whether to do PMI or a piggyback loan. I plan to have this place for more than 5 years. What is my best financing option?

Help the community by answering this question:


I am glad to hear that you are pre-approved for up to $400K and you are contemplating the idea of not using all your buying power for this property. At this time, your best option is to ask your mortgage broker or loan officer what is the difference in money between putting 10 percent or 20 percent down and see if it makes sense one or the other.

Best of Luck,

Maria Cipollone
Century 21 Tenace

2 votes Thank Flag Link Tue Oct 2, 2012
I agree with everyone that has weighed in on this. A Mortgage officer is the best place to start. I would also recommend someone local rather than the online lenders. Just a personal preference, but it is good to sit face to face and talk with someone that can see you through to the end.
0 votes Thank Flag Link Wed Apr 30, 2014
I agree with everyone that has weighed in on this. A Mortgage officer is the best place to start. I would also recommend someone local rather than the online lenders. Just a personal preference, but it is good to sit face to face and talk with someone that can see you through to the end.
0 votes Thank Flag Link Wed Apr 30, 2014
I would speak to another mortgage lender on this. For conventional you need 5% down and FHA is 3.5%. I don't believe you can be pre-approved for $400K with only $10K down. Let me know if you'd like a recommendation on a reputable lender to speak to.
0 votes Thank Flag Link Wed Apr 30, 2014
Hi Bird, I have been having great success working with ARM's of 5 to 10 years, and seeking out lenders that offer Lender Paid PMI (LPMI). Long story short, some lenders will offer a LPMI option, where you the borrower will actually willingly accept a higher interest rate for the trade off of not having any PMI. On a loan like you mentioned in your question, the LPMI option can save you a pretty good amount (guestimate of $100-$150/mo) vs paying the PMI yourself. So, it's a higher interest rate, but a lower monthly payment. Another perk, is that the entire mortgage payment will be tax deductible, whereas PMI is not. I would be happy to walk you through some different options, and see if any of them are a good fit for you.
Best of Luck!
John Hemmesch
NMLS ID# 1124472
MidWest Lending
0 votes Thank Flag Link Tue Apr 29, 2014
You should talk with a good loan officer
0 votes Thank Flag Link Wed Apr 16, 2014
First I hope you are working with a Realtor your personal and trusted Buyers Agent to find the right property at the right price for YOU! And with his or her guidance not make any investment mistakes.

Then if you are pre-approved you have done so with a local loan officer I hope....
With that same loan officer you should be able to get the detailed information about your various
loan choices, 15 years, 30 years, a 5 year ARM most of them will put it all in writing for you, how much
you pay per month, how much down etc. etc.

And yes I agree, once buying a home if you are a first time home buyer, keep a ready cash reserve
you never know, so adjust your buying power and monthly payments to allow yourself a safety pillow.
And furthermore I strongly suggest to you, to get home warranty for at least your first year, or more if
you are more comfortable with it.... the home warranty will not only pay itself depending how old the
property is, you pay a yearly amount, HWA the lowest monthly is probably around 400 $, thereafter if something does not work, the A/C or the stove, or the refrigerator, or the washer and dryer you call
the HWA company and they will dispatch someone to come and repair your cost for every call will
be 50 dollars app. do not hold me to the exact amounts, and that is all the repair man will either be able to repair for whatever cost you only pay your service call, and if they cannot repair they will
replace the entire unit.... This is a good way especially for first time home buyers new to taking
care of a home.....

I hope this helps, If you need recommendations let me know.
Sincerely yours,
Edith YourRealtor4Life & Chicago and Northern Illinois Expert

Working always in the very BEST interest of her clients, Buyers, Sellers and Investors alike....
And always with a SMILE
Covering for @Properties the city of Chicago, all N and NW suburbs, the fine homes on the
North Shore, and many of the W and SW suburbs, and with her trusted Partner Agents all of
the US and worldwide properties. Edith speaks French, German, some Spanish and other.....
@Properties, 30 Green Bay Rd, Winnetka, Illinois 60093 ---- EdithDoesItRight@yahoo.com or EdithSellsHomes@gmail.com Check out my website at htttp://www.tinyurl.com/MeetEdithHere
get to know me better and learn about my experience, expertise, services available and letters of recommendation of former clients..... Also you can sign up on my site to search for properties in my expanded service area. HAVE THE MOST WONDERFUL DAY :)
0 votes Thank Flag Link Sun Sep 30, 2012

First of all, piggyback loans up to that CLTV limit are a thing of the past, so your only option is PMI. that said, there are several PMI options that are available, and can make a difference of about $15000 over a 5 year period.

There is also a pretty strong First Time Homebuyer program that allows for acquisition prices up to $310,000, which can save you even more.

I think we should check if you qualify. If you agree, give me a call, shoot me an email or fill out an application on my website.


Matt Bukovy
Senior Mortgage Consultant
Wintrust Mortgage
Web Reference: http://www.mattbukovy.com
0 votes Thank Flag Link Sat Sep 29, 2012
Hello Vicg,

Call Tom Meneses at 312-952-2126. He is an experienced loan officer and works with a flexible bank that can cater to your needs. The truth is that there are a ton of programs available and some banks are willing to help wyle others care less. I hope you find the answer you are looking for. If you are not currently working with a Realtor I would love the opportunity to serve you. Good luck

Jorge Vega
Evolucion R.E.
0 votes Thank Flag Link Sat Sep 29, 2012
If you only have 10k down, I dont see you being approved for 400k. I would recheck with a lender, because you will eventually run into a problem. You need to put down at least 5% if your going conventional, and 3.5% if you go FHA. If your buying a condo not many of these are FHA approved, so I am assuming you will need at least 17k+ down for conventional.
0 votes Thank Flag Link Sat Sep 29, 2012
I would go with the min down of 3-5% with either an FHA loan assuming the condo (and loan amount) fits their guidelines ( condo approved etc) or conventional 'my community' program (if again if fits their criteria). Pay the pmi for a short time and refinance to a lower rate in the future. I do not think there is a program to piggyback up to 97% of total price.
0 votes Thank Flag Link Sat Sep 29, 2012
How can you be approved for 400K if you only have 10K down?? Something does not sound right. Chances are that the condo is not FHA approved. What kind of loan are you approved for? Your lender had to ask about down payment when you were approved. My web site has some lender references. They can explain your options.
0 votes Thank Flag Link Sat Sep 29, 2012
There are a few 5% down options for conventional loans on condos, and FHA at less than that if the building is FHA approved, but I think you are going to find 10% is the minimum that will work in most instances.
Piggy backs are also rare with condos now.
The conversation about PMI or not is really do you want to focus on the net monthly outlay from you as a payment, or the best loan in terms of rate and / or fees?
Since you are pre-approved I assume you are working with a lender, but the question you are asking seems to say you are not getting the answers you are looking for.

I have a some excellent lender options I can provide you, and I am sure you will get more feedback from some who are regular contributors here in this forum.

Feel free to text or call 773-732-9123, or email davehanna@realtyexecutives.com and I will get you in touch with them.
0 votes Thank Flag Link Sat Sep 29, 2012
The only loan option that would allow such a low down payment on such an expensive home is USDA and I don't know if that will work in your geographic area or for a condo. Do you have a 401K? Perhaps you could take a loan from that for the rest of the down payment. Would your family be willing to make a gift to you or the down payment? That is another option. I would suggest you meet with a realtor and a lender to discuss various down payment and financing options and then decide how to proceed.
0 votes Thank Flag Link Sat Sep 29, 2012
If you can comfortably put 10K down, I recommend purchasing a lower priced home, perhaps one that is under $100K. Feel free to contact me at angela.bailey@bairdwarner.com and I'll send you some listings from the MLS. Also send me your criteria for a home: # of beds, and baths, if you need parking, if you have pets, when you need to move in, and where you would like to live (what neighborhood). Also, I recommend speaking with a mortgage specialist, who can give you advice regarding your best financing options; I know of a conscientious and seasoned professional with whom I can put you in contact.

0 votes Thank Flag Link Fri Sep 28, 2012
Unless you qualify for a VA loan, you would need to get at least 3.5% down on the $350K house or $12,250 to even be considered for an FHA loan, which has the lowest downpayment requirement. Even then, you should budget to have at least $17-18K to cover closing costs, pre-paid property taxes, pre-paid HOA, and moving expenses. Ideally, you should have $30-40K available and use about $20K to complete a purchase with FHA at that price range. That cash position would leave you with a small financial buffer.

So, if you don't have that amount, you should either consider a condo in the $200K range to be comfortable with your $10K down or save up some more until you have that amount.

Beyond FHA, you'll need excellent credit to qualify for a 10% down with PMI on a piggyback loan. It would be a slightly cheaper option than FHA. In that case, you'll need to bump your cash position to about $45-50K to purchase a $350K condo.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Fri Sep 28, 2012
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