80/15/5 possible?

Guest 0.10 Dollars($)

I am looking for a 80/15/5 mortgage for a home in Texas. The purchase price is 435000. The borrowed amount is 413250. My wife and I have a monthly gross of 12300. We have a $450 car payment and a $700 401K loan. We have about 110000 in liquid assets and about 260000 in 401k. my Fico is 735 and hers is 765. What would be a good rate? And would we qualify as our DTI is 39% on the high end. We can fully document and we have been working for the same company for over 10 years.

evolovik26 · Posted: Wed Nov 28, 2007 8:34 am Post subject:

80/15/5 is possible in your situation but depending on the program and the lender you might be better off with going 95% conforming loan with MI. If everything you saying is correct you should be able to get either loan and its a matter of what you feel is more beneficial for you. You should get a rate in low 6s if you getting a standard 30yr fixed and you can even buydown your rate into high 5s if you wanted to. Depending how the market does this rate may vary. So look for high 5s to low 6s. If you have more questions contact me here or call or email me.

jenkin7 · Joined: 04 Jun 2007 Posts: 880 131.00 Dollars($)

Hello Hesser,

I think the 80/15/5 piggyback loan will be better than the 95% ltv. In case of a piggyback loan you don't have to pay the mortgage insurance and this will save money.

Let me explain with an approx calculation:

For 95% ltv loan say interest rate = 6% for 30 years.
Monthly payment = 2478 approx towards principal and interest.
PMI = 269 approx
Total monthly payment = 2747 approx

In case of a piggyback loan,

80% first mortgage loan amount = 348000
Interest rate = 6% approx for 30 years.
Monthly payment = 2087 approx

15% second mortgage loan amount = 65250
Interest rate = 7% approx for 15 years
Monthly payment = 587 approx
Total monthly payment = 2674 approx

So, this implies that if you go for a 95% ltv loan you will be paying around 73 more each month than the piggyback loan.

I just gave you an approx idea as the interest rates will vary. You may calculate the difference with the rates you are offered. You have to shop for lenders in order to get a reasonable rate. You may also try for an FHA piggyback mortgage.

Hope this helps you. Feel free to ask the community if you have any further query.

0.10 Dollars($)

And then there's LPMI for a 1.15 point cost. Weigh that against the cash flow on the 2nd plus the extra cost – closing, recording, etc. Actually in today MORNING market, you’d be looking at 6.00% plus 0.35 points for the LPMI. (market got getter as day progressed) Consider ALL your options.

Ratios shouldn’t be a sweat. Remember the 401K loan doesn’t count on debt service; yes, on reserves.

rick · Posted: Thu Nov 29, 2007 6:22 pm Post subject:

Hi Hesser. Here's a little more info. A good mortgage broker can talk to you about break even points - so there is no one right way for everyone. Having said that, a good wholesale rate today for a 30 year fixed, Conforming amount, is 5.75%. You seem to be an ideal candidate, so you shouldn't have any problem getting that rate - maybe even better.

For the 2nd, I know you can get at least 8.75%, and probably better by having you mortgage broker doing a dedicated search. Unfortunately, not too many lenders go to 95% CLTV, but a few do.

Even using a rate as high as 8.75%, your blended rate is 5.91%, which is excellent. Good luck.

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