Profile picture for wt453

If I have a good credit score (750), can I still get a conventional loan with only 5 percent down?

I prefer a conventional loan as opposed to an FHA loan, but I am wondering if any banks are still lending with only a 5 to 10 percent downpayment? If not, I imagine I'll have to go the FHA route as a first-time buyer. 
  • March 12 2009 - Manchester
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Answers (7)

Profile picture for Dallas Banker
I would put a caveat in what Jim just shared for those reading this post for general information - 95% LTV is still available in some states (Texas, being one of them), it's just no longer available for this scenario in Connecticut.
  • June 24 2009
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Since the date of your original inquiry, the private mortgage insurance companies have stopped offering PMI at all credit score levels over 90% loan-to-value.  Lenders would do 95% LTV but not if insurance isn't available.  The earlier comment about overall costs of FHA vs conventional insured was valid, and works in most circumstances except hold periods of just a few years or less -- which is a dangerous proposition in this market anyway.

If you are VA eligible you should look at that; refi's can be done up to 100% LTV.  It's not just a 100% purchase program.
  • June 24 2009
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Hi Manchester CT, 

I would  look into a CHFA loan For 1st time buyers ! 
Low to No Down and  fix ed  rate .

Best of Luck
  • May 21 2009
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  • May 13 2009
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You should have a loan officer show you the difference between a conventional and a FHA loan....you may see that a FHA is better because the mortgage insurance will be lower.
  • March 12 2009
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wt453,

I concur with Bob's assessment and would ask you to seriously consider an FHA insured loan as a real option. The one variable pursuing a conventional mortgage is the willingness of mortgage insurance companies to insure your loan. As foreclosures and defaults have skyrocketed over the past 18 months, mortgage companies have been taking it on the chin.

Consequently, they are more restrictive based not only on credit but also the zip code of the home. Another item that you need to pay particular attention to is the amount of coverage and the monthly costs associated with higher mortgage insurance premium costs that are being passed on to you.

Since you are a first-time homebuyer, make sure to speak with your real estate professionals about the $8,000 tax credit. Good luck, James
  • March 12 2009
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Yes, many are still lending with conventional 10% down, and you can even find some with 5% down.  You may need to look a little harder for the 5% down.

Some lenders will require an extra 5% down if you are in a county that is designated as a declining market. 

When you sit down with your Loan Officer, you should still compare the difference between FHA and Conventional.  Your credit score will most likely dictate which route is better.  Make sure you explore all alternatives.

Best of luck.
  • March 12 2009
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