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06.25.08, 17:34 PM General Topics
7 replies
Is there any type of a penalty or drawback to putting only 5% down on a home? It is a three family home and the rent from the two other units would more than pay for the monthly payments. TIA [ Reply | Watch | Flag ]
General Topics 06.25.08, 05:34 PM Flag
 

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you probably won't get a really great interest rate and may need to pay private mortgage insurance [ Reply | More
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General Topics 06.25.08, 05:36 PM Flag
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Yes, you have to pay PMI (mortgage insurance) for anything less than 20%. Sometimes you can just get a secondary loan at a higher rate instead (we did this a few years ago). But right now, it would be hard to get a company to approve you at all for only 5% [ Reply | More
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General Topics 06.25.08, 05:36 PM Flag
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I've been pre-approved by Wells Fargo...The agent said they will approve as long as I put down 5%. Both my dh and I have high credit ratings. I will be in that state for five years and I would rather own than rent. [ Reply | More
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General Topics 06.25.08, 05:40 PM Flag
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That's great you have been pre-approved. It is in NO WAY a guarantee of actually getting the mortgage. You should definitely discuss with the broker the various ways of breaking down the loan (to avoid PMI). [ Reply | More
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General Topics 06.25.08, 05:42 PM Flag
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Thanks a lot for all of this info. I knew you ladies would be a good starting point. Luckily I am working with a bank agent that owns my other home and he's been quite helpful. I hope this comes through. [ Reply | More
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General Topics 06.25.08, 05:44 PM Flag
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GL! Sounds like a great opportunity. [ Reply | More
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General Topics 06.25.08, 05:45 PM Flag
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In this credit market, you will have a very hard time getting a loan at 95% LTV. Especially if there is an investment component to the property. You may find someone willing to give you an 80/10/10. But the 10% mortgage will have a higher rate than the 80% mortgage. [ Reply | More
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General Topics 06.25.08, 05:37 PM Flag
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