Question: Are there good loan options available if I don’t have 20% or more to put down?
Answer: There are an abundance of loan products on the market that cater to different professions, down payments and financial circumstances that you should be aware of. “Rate shopping” is easy and moderately effective, but “product shopping” can be much more valuable and something an informed Agent can assist you with. Here are some of my favorite loan programs and the lenders I work with who provide them:
Doctors: Doctor Loan Program from SunTrust: CJ Kemp (email@example.com, (301) 651-4189)
The Doctor Loan Program is a residential mortgage loan specifically created for licensed medical professionals to make obtaining mortgage financing easier and more hassle-free. It recognizes the financial toll of medical school and strong, stable future income post-graduation. The rates on these loans are also fantastic.
Eligible Doctors include:
- Licensed residents/interns/fellows in MD and DO programs
- Medical doctors
- Doctors of osteopathy
- Doctors of dental medicine/surgeons/orthodontics/general dentists (DMD/DDS)
- Psychiatrist licensed as a medical doctor
Available financing terms include fixed and adjustable rate mortgages for purchases and rate/term & cash out refinances.
- 0% down up to $750,000 loan amount
- 5% down up to a $1M loan amount
- 10% down up to a $1.5M loan amount
- No mortgage insurance required
Homeowners Buying And Selling: Second Trust/HELOC Program from First Home Mortgage: Jake Ryon (firstname.lastname@example.org, (202) 448-0873)
This is a great program for current homeowners who will be buying and selling simultaneously. It allows you to use the future proceeds from your home sale to make a large down payment on your new home, before even putting your current home on the market.
They partner with local banks and credit unions to provide you with a second trust that allows you to put as little 5% down up to nearly a $1,000,000 loan amount. The second trust finances the remaining amount of your down payment (e.g. 15% if you put down 5%).
The HELOC/second trust payment is interest-only, can be paid off any time and can be used like a bridge loan to allow you to purchase a new home without a home-sale contingency and to sell your existing home unrestricted.
Low Down Payment: Mortgage Insurance Payment Eliminator from McLean Mortgage: Troy Toureau (email@example.com, (301) 440-4261)
This program enables you to put as little as 3% to 5% down using conventional financing (not FHA) and eliminate the monthly mortgage insurance payment by making a one-time more affordable payment. This provides multiple benefits including a potential increase in buying power by reducing the Debt-to-Income ratio (lower monthly payment), allowing you to negotiate for the seller to make this payment by rolling it into closing costs, and ensuring that the entire payment is tax deductible (confirm with your tax advisor).
Large Loan Amounts: Non-Confirming Jumbo Loan Program from Wells Fargo: Email me for contact info at Eli@EliResidential.com
It’s not just the Doctors who can find low down payment options without mortgage insurance for high-value (jumbo) loans. Wells Fargo’s “Professionals” Program lets you put 10.01% down on loans from $424,100 up to $1,000,000 without any mortgage insurance and the rates are incredible. They have options for fixed and adjustable mortgages as well. A high credit score and strong income are key factors for qualifying. It’s referred to as the “Professionals” Program because it’s popular amongst high earning, non-medical professionals like lawyers and consultants.
Make The Right Choice
Choosing the right lender is a combination of selecting the program that’s right for you, getting the best market rates, and working with somebody who provides a high level of service. Earlier this year I wrote an article with additional tips for selecting and comparing lenders. If you have any questions about the programs I summarized above, other lending programs like construction and rehab loans, or would like an introduction to one of my preferred lenders please reach out to me at Eli@EliResidential.com.