FHA Loan for Your Ladera Ranch Purchase
When it may not make sense with a low downpayment5/5 Posted on November 29, 2010 by Pete Thistle.
Are you a low down payment buyer interested in buying in the Ladera Ranch real estate market? If so, then you will want to know some valuable information that may increase your purchasing power and save you a lot on your monthly payment.
A typical FHA loan requires 3.5% down and in today's market most conventional loans are requiring 20% down. A part of financing your Ladera Ranch home or Ladera Ranch condo purchase with a FHA loan is understanding the additional monthly cost for private mortgage insurance (PMI), which is required on all FHA purchases to protect the lender. This PMI decreases your purchasing power or the amount you can afford, but allows you based on qualification to buy a new home with as little as 3.5% down. However, if you are able to come up with 5% down, your lender may be able to offer your a conventional loan with PMI that could increase your purchasing power, potentially up to 15%, and lower your monthly payment by approximately 10% based on the decreased PMI you would have to pay as well as principal and interest.
You will want to consult with a mortgage professional to understand the products that they offer and if you qualify. For a list of Ladera Ranch mortgage professionals, please contact us.