Mortgage Question. Can you still get a 90% loan to value loan?

GoBlue34 · Mar 17, 2009

Is that still possible? Can you get a home loan for 90% of the homes value? Meaning you only have enough to put down for 10%. I would assume one would get a 80% first mortgate and a 10% 2nd to avoid PMI?

Is that still possible? One bank told my friend they only do 85% loan to value but I assumed that was just his bank's policy, not a new blanket policy?

Anyone know?

3peet · Mar 17, 2009

GoBlue34 said:
Is that still possible? Can you get a home loan for 90% of the homes value? Meaning you only have enough to put down for 10%. I would assume one would get a 80% first mortgate and a 10% 2nd to avoid PMI?

Is that still possible? One bank told my friend they only do 85% loan to value but I assumed that was just his bank's policy, not a new blanket policy?

Anyone know?

You going to have to pay the mortgage insurance with any LTV over 80%. There's zero market for 2nd mortgages. Since values are still falling, no one wants to stand behind a 1st mortgage since there's way too much risk.

HOWEVER you can get a second or a HELOC or 2nd if your CLTV is under 80%

GoBlue34 · Mar 17, 2009

3peet said:
You going to have to pay the mortgage insurance with any LTV over 80%.

I don't think that is the case, at least it wasn't with my first home which was an 80% 2nd of 5%. Maybe times have changed though...

bigtendominator · Mar 17, 2009

Wow, I am not sure how you didn't have to pay it, but my understanding is the same as 3Peet. I would think with 80% you have to pay PMI.

GoBlue34 · Mar 17, 2009

That is where you have the option. I can do a 90% 30 year loan but have to add PMI to that total. The benefit is my payments would be lower.

Doing a 30 year loan at 80% for 30 years, then a 2nd loan at 5% for 5 years, my payments will be higher but no PMI.

Again that's what I did 8 years ago anyway.

3peet · Mar 17, 2009

At this point Blue, go with the financing you can get. You won't be able to find anyone to give you a 2nd mortgage. The rules have changed now.

PMI is applied everywhere for anything over 80% period. It's mortgage insurance for the lender who's lending a risky loan. (e.g. any loan >80% loan to value) Doesn't matter if it's your local bank's product, or an FHA/FNMA loan or a loan from a wholesaler or broker. Your going to have to pay the MI.

Just as a heads up the secondary market ended around mid 07. I've advised me clients of this since then instead of wasting time and letting the rate's get away from them. Or in addition the underwriting rules. The underwriters are EXTREMELY finicky right now and I just keep my fingers crossed that the lenders approve my customers.

Again, take the financing you can get.

GoBlue34 · Mar 17, 2009

Thanks for the info Pete. Final question since you know what you are doing, I did a live chat with Quicken and they agreed with you on the no more 80/10/10 loans. She did say however they will waived PMI if your credit score is 740 or higher and you have 10% down?

3peet · Mar 17, 2009

jgrif33 said:
I am doing a refi on my loan. Should I lock in or let it float (closing 30 days out)?

couple quotes i received -
5.375% .750pts
5.125% 1pt
5.250 .850pts

It all depends JG. If you financial information (salary, job history, bank statements, 401k info, etc) are all solid then lock in whichever pricing your comfortable with. Just remember 30 days goes awful fast during bank times. (and they don't count weekends to get paperwork done)

The rates have hovered around this range for about a month now with a few variations.

I guess what i'm saying is

If your paper work is in order (financials and personal info)
Your credit is solid =/+700
your loan is less than 80% LTV

then go ahead and lock it since you shouldn't have a problem getting it done. If your unsure about the above wait. Personally I like lock after the appraisal is completed and I get that done right at the beginning. Atleast then you know what your working with.

GL!

3peet · Mar 17, 2009

GoBlue34 said:
Thanks for the info Pete. Final question since you know what you are doing, I did a live chat with Quicken and they agreed with you on the no more 80/10/10 loans. She did say however they will waived PMI if your credit score is 740 or higher and you have 10% down?

Not sure if that was your question. Is PMI waivable if =/>740 credit? Yes, BUT it depends on the lender. I guess in this case your's is with Quicken. Each bank's rules vary.

As for the 10% down, i assume your doing a purchase so it looks like you have that covered since you only needed 85% financing, I've i understood your scenario.

If you need more clarity, PM me and i'll help you out more.

hope this helps.

3peet · Mar 17, 2009

JG,

It really is personal preference. How long your staying in the home, how much is you loan amount, what the difference in monthly payment between the 2 rates? If the difference in payment is significantly lower between the two rates AND you plan to be in this house for alteast + 5 years, then there's a possibility you can recoup the closing costs by then and in turn know you got yourself a good loan.

The main thing is (1) are you gonna save money monthly if you pay a point or not (2) will you be in the house long enough to realize the re-couped closing costs.

GL

joebatters · Mar 17, 2009

I would suggest you check out www.quickenloan.com

I refi'd with them last year about this time, and at the time they had a loan called the 'PMI buster'. Ithink you would have to pay a quarter of a point more on your loan and your credit has to be good, but you can get rid of bs PMI.

ParanoidAndroid · Mar 18, 2009

The rules are different if youre doing a purchase or refi, first home, etc.

We just closed on our home last month. 3% down FHA loan at 5% for 30 years

Yes, we're paying PMI but the builders around here as so desperate that they even bought the points for us! Life is good.

Mortgage Question. Can you still get a 90% loan to value loan?

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