In high-cost areas like San Francisco, Los, Angeles, Seattle, Colorado, South Florida, and Boston, many homebuyers who qualify prefer not to put 20-percent down. In addition, existing homeowners who purchased a few years ago have realized increases in equity and may want to cash-out some of the gains. In San Francisco, the median home price has surpassed one million dollars so being smart and creative when it comes to your financing options has never been as important as it is today.
A couple of solutions for homeowners and buyers alike is a 10-percent down mortgage or 90% LTV financing. Two attractive options exist for borrowers. The first is an 80/10/10 loan where a buyer needs to come in with a 10-percent down payment on a purchase transaction up to $1 million.
Here's an example of a 90 LTV Jumbo Loan:
Purchase Price: $1,000,000 (now 90% up to $2 Million; UPDATED: March 2022)
Loan amount: $900,000 - Just one loan with NO Mortgage Insurance
Down payment: $100,000 - from borrower
End Result: 90% LTV financing
What's Needed?: 6 months liquid reserves and a 720+ middle credit score
Could this be a good option for you? Consider financing your home with these jumbo loans in California or other states.
The second method in the image below is also 90% financing but is structured as follows:
Purchase Price: $1,213,000
Loan amount: 970,800 - 1st loan on a conforming 30-year fixed rate (high balance maximum)
Second loan: $120,900 - - 2nd loan is either a fixed rate or line of credit (prime index + margin)
Down payment: $120,900 - from the borrower
End Result: 90% CLTV financing
This may be a better option if you have a credit score over 740 and 9-12 months of reserves. You get a conforming first mortgage (lowest rate) and a piggyback second loan. If you're able to pay off the second loan within 5-10 years, it's really becomes advantageous.
Disclosure: Rates, APR, and terms will vary based on borrower's credit score, payment history, and loan purpose(refinance or purchase).
We also offer Jumbo VA loans in high cost counties that usually come out to be less than 10-percent down when dealing with properties one-million dollars and below.
Quick Closings in 15 days!!
If you need to close your loan fast (in less than two weeks), that is available for loan amounts below $1,000,000 for borowers who provide traditional income documentation.
Keeping more assets available has advantages
The first advantage is if you have an investment portfolio, it can remain untouched and keep earning dividends or gaining in value.
You may actually qualify for another real estate property that is available
By financing more of the purchase, your itemization of mortgage interest tax write-off should go up.
There are more purchase loan programs over $1.5M that only require 15% down from the borrower's own funds in order to avoid the requirement of paying mortgage insurance.
Low down payment highlights:
10% down – 90% financing up to $2.5 million with “full documentation” - job, income, and assets.
now offered in: ALL STATES