San Diego Conventional 97% LTV Mortgage Loan Q and A (2017 Update)

When you’re looking at a loan program, you’re going to have at least a couple of questions.

Although the information may be in our articles, we know that you need the answers fast.

In this post, we’ll be going over some of the most common questions about the 97% LTV mortgage loan.

Here's a quick rundown of our list:

But these are just the basics.

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.

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

Can I Buy a Second Home With This Loan?

San Diego Conventional 97% LTV Mortgage Loan Q and A (2019 Update)

No.

This loan isn’t intended for second homes.

One of the requirements for the buyer is that they need to have not owned a house in the last three years.

This requirement means that you won’t be able to use it for anything that your primary residence.

When it comes to even picking out your primary residence, you will be limited on the options that you can look at.

This is because the loan is aimed at new homeowners and not those that are just looking for a low down payment.

Is There a Maximum DTI (debt-to-income) Ratio That I Will Need for This Loan?

San Diego Conventional 97% LTV Mortgage Loan Q and A (2019 Update)

Yes.

However, it isn’t a simple as giving you a number.

Each lender will look at your situation individually before they decide on something.

However, many people in the business have a general maximum that they follow.

Most lenders will stop at 43%, but there are some situations and some lenders that will bend those rules a little bit.

I will need to talk to potential lenders and see what they say about your situation.

Can I Use Gift Funds with This Loan?

San Diego Conventional 97% LTV Mortgage Loan Q and A (2019 Update)

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Yes.

Gift funds are often overlooked or not thought about until the situation becomes dire enough.

For some people that are looking to become a homeowner, they might have a family member that wants to cover part of the down payment or all of it.

There are some rules that need to be considered when you want to use gift funds on a home. 

However, for the most part, all gift funds are accepted.

You will need to discuss it with the lender and make sure that everything is working out.  

However, it can mean that you won’t need to pull some of the money out of your own pocket for the purchase of your first home.

Is There Still PMI on a Mortgage Loan Like This One?

San Diego Conventional 97% LTV Mortgage Loan Q and A (2019 Update)

Of course.

Almost all lenders need PMI to protect their investment in you.

PMI makes sure that even if you miss a payment, the lender will still get paid.

Your lender will have the insurance put together and they will be able to calculate how much you need to pay every month.

PMI rates will go up if your credit score is lower because you are more of a risk for the lender.

This is just something that we have to use to as it protects nearly everyone involved.

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Can I Get 3% Down on a Loan Over $424,100?

San Diego Conventional 97% LTV Mortgage Loan Q and A (2019 Update)

Nope.

This particular down payment program is only available on loans under this amount.

If your credit score is good enough, then you may be able to get a loan with a 5% down payment, but that extra 2% can cost quite a bit when the value of the loan goes up.

The 3% down payment is unique to this loan where the maximum is $424,100.

Is This Available as a Refinance?

San Diego Conventional 97% LTV Mortgage Loan Q and A (2019 Update)

Yes.

It is a separate program from this one and you will have to discuss what it means and how it looks for your unique situation with your lender, but it is a possibility.

The normal loan can really only be found as a fixed-rate mortgage loan for $424,100 or below.

Is There a Limit on My Income in Order to Qualify for This Loan?

San Diego Conventional 97% LTV Mortgage Loan Q and A (2019 Update)

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There is no income limit associated with this particular loan.

However, other loans that are meant to be easier for people to get do have loan limits.

If you are considering other loans, then you’ll want to be aware of what that loan might be.

Some loans like the HomeReady 97%  and the Home Possible 97% loan is based on the median income of the area that you are living in.

The median income will be based on the county that you live in.

For San Diego, the most current number is $79,300.

This means that if you’re making right around this, then you will definitely be able to qualify for the loan. 

Can I Make a Down Payment That is Higher Than 3%?

San Diego Conventional 97% LTV Mortgage Loan Q and A (2019 Update)

Yes, actually.

You are not limited by the loan to only making a 3% down payment.

You might have started out with the 97% LTV loan type because you didn’t think you could pull together money and then found out that there was more for you to use.

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That isn’t bad news for you.

In fact, it is great news!

The one thing that you will want to know as you are getting ready to send in checks though is that if you pay more than 5% of the loan, then you won’t be part of the 97% LTV loan program anymore.

This can affect quite a bit, so you may want to think about how this will affect the future of the loan.

You can always discuss this with me or contact your lender and discuss the options that you would have if you moved out of the program.

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

Your 97% LTV Insider, 

Scott

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