With the Federal Reserve Open Market Committee poised in June of 2018 to increase in the rates that impact home equity lines of credit (“HELOCs”), home buyers who have traditionally used “piggyback” or “80-10-10” solutions to purchase a home with less than a 20% down payment may have second thoughts. Not about buying the house, per se, but about a HELOC rate that could approach 7% — with future adjustments possible as well. When Prime Rate was in the mid-3% range, most 80/10/10 loans had very palatable start rates but after a decade of seeing 3’s, 4’s and 5’s in front of most quoted mortgage programs, the rarefied air of 7% may very well make some buyers hypoxic. What we’re seeing them do is look at single loan solutions with no PMI. In the jumbo mortgage range, buyers who are looking to put only 10% down — which is half of what most buyers expect — are shifting their attention to these programs and we have a deep roster of options for them to consider. Let’s look at each as we go up the purchase price ladder:
Up to a Loan Amount of $850,000 (max purchase price of $944,000 w/ 10% down)
- 5/1 ARM, 7/1 ARM, 10/1 ARM and 30-Year Fixed. 720 minimum FICO score and 6 months reservesrequired.
Up to a Loan Amount of $1,000,000 (max purchase price of $1,100,000 w/ 10% down)
- 5/1 ARM, 7/1 ARM, 10/1 ARM and 30-Year Fixed. 760 minimum FICO score and 6 months reserves required.
- 5/1 ARM and 30-Year Fixed. 720 minimum FICO score and 9 months reserves required.
Up to a Loan Amount of $1,500,000 (max purchase price of $1,666,000 w/ 10% down)
- 5/1 ARM and 30-Year Fixed. 720 minimum FICO score and 9 months reserves required.
- 30-Year Fixed. 720 minimum FICO score and 12 months reserves required.
Up to a Loan Amount of $2,500,000 (max purchase price of $2,777,000 w/ 10% down)
- 5/1 ARM and 30-Year Fixed. 720 minimum FICO score and 9 months reserves required.
- 7/1 ARM and 30-Year Fixed. 740 minimum FICO score and 24 months reserves required.
Up to a Loan Amount of $3,000,000 (max purchase price of $3,333,000 w/ 10% down)
- 7/1 ARM and 30-Year Fixed. 740 minimum FICO score and 24 months reserves required.
My real point above is that we have six investors who make loans in the jumbo space with as high as a 90% loan-to-value (LTV) and the reason that depth is important is that often there is a specific need the borrower has for this type of financing. With our expansive product line-up we can more easily find the right fit.
Many lenders will tell you that a 10% down jumbo loan is not possible. Don’t believe them. Instead, inquire with me and I’ll quickly determine how you can succeed with less than a 20% down payment in the California jumbo market.
Half as much is twice as nice,
Vice President of Mortgage Lending
NMLS: 22343
Cell/Text: 415-367-5959 Fax: 415-366-1590
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709
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