I know this depends on each person’s situation, however when my family goes to buy our second home, we will probably only have enough profit from the sale to put 15% down. I want to avoid 100% financing if I can. What would be the best way to borrow that other 5% on say like a 5-7 yr loan?
We are selling out condo in CA and trying to move up to a single family detached home. If we opted for a townhome we could definitely make 20% or more down, but we really want to have a house since we have young children.
Get a few referrals or just find some good loan officers (both brokers and bankers) and get some quotes.
It’s possible it will be better to do an 80% first, and 5% second, but it’s likely that doing one loan at 85% and taking the mortgage insurance for a year or two is the better deal.
But you have to find someone to run the numbers for you, for your particular situation.
August 18th, 2010 at 6:43 pm
You are looking at an 80-5-15 loan. 80% on the first, 5% on a second, and 15% in cash. The 5% can be a variety of things. I would try and get a Seller carried second for 5% of the purchase price. If not, then look at a closed ended 2nd mortgage from the lender that provides the 80% mortgage. This will avoid PMI. Your other option is to get a 85-15, but you will pay PMI (though greatly reduced compared to 100% financing). The upswing of that is you will be able to eliminate the PMI payment within a few years.
Best of luck.
References :
Mortgage Broker, http://www.losethearm.com
August 18th, 2010 at 6:57 pm
Get a few referrals or just find some good loan officers (both brokers and bankers) and get some quotes.
It’s possible it will be better to do an 80% first, and 5% second, but it’s likely that doing one loan at 85% and taking the mortgage insurance for a year or two is the better deal.
But you have to find someone to run the numbers for you, for your particular situation.
References :
10 years in mortgage banking