How To Buy More House with The Same Dollars

Save Money on Mortgage PaymentListen Up San Ramon Valley Home Buyers – 95% Financing is Real

Recently an email passed thru my inbox regarding 95% financing. Always on the look-out for any program making it easier for San Ramon area buyers to purchase a home, I immediately followed up on it.

I checked with a couple of lenders in my circle and they were unaware of the program. I asked that they please find out about it to see if it was worth pursuing for my San Ramon clients. Well it turns out this is a loan program that was popular in the past (not sure how far in the past) and is back. One of my lenders wanted to make sure he understood the program, inquired to those in his office that were aware of every program for financing. The answer YES this is a legitimate program. And it makes perfect sense.

95% mortgage loan has many benefits

When compared to a FHA loan at 3.5% down and with mortgage insurance added to the payment, utilizing the 95% money with PMI rolled into the loan amount provides buyers with the ability to purchase more home. It further makes sense since last week the interest rates dropped again to “all time lows” (I know we keep saying that but this time it’s true ).

Let’s take a look and compare a $500,000 purchase price:

FHA 3.5% Down Conventional 5% Down
Loan Amount                    $482,500  $475,000
Interest Rate  4.25%  4.75%
Taxes 1.25% $521/mo. $521/mo.
Homeowners Insurance $75/month $75/month
Mortgage Insurance 1.15% n/a
Principal & Interest $2,373.61 $2,477.82
Taxes $520.53 $520.53
Insurance $75.00 $75.00
Mortgage Insurance $462.39/mo. $0
Payment $3,431.53 $3,073.35

So bottom line, what does this really mean – if you qualify for a payment of $3400 per month then you will be able to afford more house for your money.Check with your loan officer to determine how much more.

Benefits of the 95% LTV & Lender Paid PMI:

  • Reduce your monthly payment
  • Afford more house with the same dollars
  • 95% financing
  • 680 Credit Score
  • Interest is deductible – MI is not

**Conforming loan programs only.

 

 

 

 

 

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