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First Time Home Buyer w/ 800+ FICO score & 140K Annual salary but only 5% downpayment

Hello..I am first time home buyer with 800+ FICO score, 140K salary. I am looking for a Townhouse in Fairfax, Herndon area for around 450,000. I can only make 5% downpayment. Can you please suggest what would be the best options for Loan. From my research it seems 5% conventional would work out better than FHA. Please advice
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March 20 2013 - Herndon
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If you can get that loan amount down to $417k then a 5% conventional loan is not a problem and going to save you a ton of money over a FHA loan.  Plus there are ways to manage the mortgage insurance so that you are not making a monthly payment towards that as well.  Happy to help if I can
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March 21 2013
Clay is right, FHA is your only option unless you can structure an 80/15/5.
The issue then becomes can you find a lender to actually do the second trust at 95% LTV. They are few and far between.
Best wishes, Jim
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March 21 2013
Wow, a lot of people would do anything to have a score like that.  A 5 percent down conv loan would work great.  I would contact a local lender and see what they can do for you.  Congratulations you are about to be a home owner. 
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March 21 2013
A single Conventional loan is not available with a purchase price of $450K and 5% down. If you buy for $439K or less then you can use 5% down and get a Conforming loan. If you can only find properties you like in the 450K or higher range then you can use an 80/15/5 structure to keep the first mortgage Conforming.   
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March 21 2013
Go with the 95% conventional for sure. It will also be a more attractive offer for the seller as FHA loans have more potential glitches. If this helps please click on the "thumbs up" button at the lower right of this post. Good luck to you!
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March 21 2013
With out a doubt go Conventional. With 5% down you also may have the chance to buy out of your mortgage insurance through the interest rate and not have any monthly mortgage insurance to worry about again.
Talk to a couple of local loan officers in your area about this program.

Best wishes and take care, 
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March 21 2013
Definitely want to speak to your Lender, FHA rules are changing (EVERYDAY it seem) as of April 1, 2013 and afterward June 3, 2013 to have a PMI or Principal Mortgage Insurance for the LIFETIME of the loan, unless you later refinance with the hopes you have enough equity built up to have it removed. You would have to be contracted before April 2013. Also, the PMI premium is going up. I am in Texas...so that is what it is here. If you contracted FHA soon, you will have to have PMI for minimum of 3 to 5 years of the loan, then it drops off...this is more reasonable. The lifetime of loan & higher premiums is a little harsh in my opinion. BUT, we the people bailed the banks out, so we the people have to foot the bill.

Conventional loans starting at 5% down are the best way to go from this point forward. Simply because, PMI is so costly, so it would be worth it to come up with a little more down to avoid PMI for the lifetime of the loan scenario. PMI is throwing money away. Good luck and great question by the way!
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March 20 2013
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5% conventional w/ those stats should be no problem. Only issue you might run into is that if the property appraises for less than your purchase you will have to pay additional cash into it since the LTV is calculated by your appraised value. 
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March 20 2013
 
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