San Diego Conventional 97% LTV Mortgage Loan Pros and Cons (2017 Update)

While you might be considering the 97% LTV mortgage loan, you will probably want to know whether or not it is a good choice.

Figuring out if it is a good choice will largely depend on the benefits and the costs that are associated with the program.

We will be going over them, but this information is just a jumping off point.

Here's a quick rundown of our list:



If you want to know more about a 97% LTV mortgage loan, check out our main article on the loan, our answers to some common questions, and our article about the loan limits.

If you are uncertain if the loan is the right fit for you, then you may want to check out our article with the reasons why the 97% LTV mortgage loan is right for you.


San Diego Conventional 97% LTV Mortgage Loan Pros and Cons (2019 Update)

Must Read: San Diego Conforming Mortgage Loans - Rates, Terms, Limits...

Low Down Payment

The best part of this loan program is the amount that you pay for the down payment.

The amount is 3%.

This amount is lower than other loans that are directed at low-income families.

This means that you’ll be able to get your loan and not have to worry so much about the down payment.

For those that haven’t had the chance to own a home, especially those that find themselves living from paycheck to paycheck, this can be a great chance to get their roots in a real home.

Good for New Homeowners

Because of the qualifications that are necessary for a buyer to qualify for this loan as well as the low down payment, this loan is great for those that haven’t owned a home ever.

However, you don’t have to be a brand new homeowner to qualify.

The qualifications just have a restriction on how long ago you could have owned a home before you begin.

So if you had to move into an apartment for a couple years because your job wasn’t paying enough to cover the savings for a down payment, then this might be the time to do something new.

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Loan Covers a Reasonable Home

While there is a lower limit on this home, this isn’t that bad of a deal.

The limit that they impose on this loan is meant to make sure that you’re not getting a home that is overly expensive.

Because the median cost of a home across the US varies wildly, the limit on this loan was put a little higher to make sure that people in areas with more expensive homes.

San Diego is one of the counties where the prices of homes are higher, so this is a great thing to have included in a loan.

Options For Home

While you are limited, there are still options for the style of home that you get.

You can get a single unit home with this loan, but you can also get a condo, co-op, or even a PUD.

Having options is great because it means that you’ll be able to find a space that is yours.

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Being allowed to look at homes other than single unit homes expands the number of spaces that you can look at instead of decreasing them.

Which option will work best for you will largely depend on what your lifestyle is like.


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San Diego Conventional 97% LTV Mortgage Loan Pros and Cons (2019 Update)

Credit Score

Like with many other home loans, you will have to take into consideration that there are requirements that you have to meet.

Knowing the credit limit is 620 may make some people a little uneasy.

With student loans and debt from other sources, some people might not have the right credit score in order to qualify for this loan.

However, if your income level or your situation has unfortunately left you with a lower credit score, then you will have to find another loan to use.  

There are some loans that have low down payments with low credit scores. 

However, they likely won’t have a loan with a down payment as low as this one.

Maximum Loan Amount

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The loan is capped at $424,100.

This fact is nice for the majority of the United States, but that doesn’t mean that it will be great or those people that live in San Diego.

The costs of a home in San Diego on average are more expensive than the loan limit for this loan.

However, you will still be able to find homes that are under the limit.  

However, you might have to compromise with not having the nicest home.

This compromise can work for some people, but it can be a reason not to go for this loan for many other people as well.

Not All Homes Qualify

As we mentioned in the pros, you have options for the home that you get.

However, there are not a ton of options.  

You will have to focus on single unit homes and other smaller units of homes.

You won’t be able to get homes that include multiple units.

This can be a downside for people that were hoping to get rental income from their home.

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Qualifications for Buyer

Besides the credit score requirement, you will have to have not owned a home for several years.

This requirement can mean that someone that isn’t making enough to save up for the down payment on another home loan may have to wait a couple more years before they try and get a home.

There are other loans with low down payments that can work for these individuals, but their down payments are at least 5%.

If you want to know more about a 97% LTV mortgage loan, check out our main article on the loan, our answers to some common questions, and our article about the loan limits.

If you are uncertain if the loan is the right fit for you, then you may want to check out our article with the reasons why the 97% LTV mortgage loan is right for you.

What do you think?

Leave a comment below - or, call/text me at (760) 297-4539

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