San Diego's #1 3% Down Conventional Home Loan for 2021
(Please note, this video was created prior to 2021 - but, these loan amounts, and loan details below, have been updated for 2021...)
✍️ In this video I break down the ins and outs of the 3% down conventional home loan in San Diego.
✍️ This mortgage loan is great for anyone that wants to put down as little as 3%, get a loan amount up to $548,250, or put down as little at 5%, and get a loan up to $753,250 and take advantage of record low interest rates.
In this video I cover:
- Whether it's just for FTHB or not...
- If it works for investment property or not...
- The minimum down payment needed...
- The max loan amount allowed...
- The max DTI allowed...
- If it's possible to buy after a chapter 7, 13, foreclosure, or short sales...
- and more.
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Here's the main points and highlights:
➡️ You do *not* need to be a first time home buyer - you can have owned before and/or never owned anything ever.
➡️ This will work if you are looking to live in your home, it's a second home, vacation home, or investment property.
➡️ This works on any livable home, PUD (planned urban development), town home/condo, and livable 2 unit, 3 unit, and 4 unit properties. I do *not* personally deal with land, mobile, or manufactured homes.
➡️ The minimum down payment needed is just 3% up to a $548,250 +/- loan amount. Just take your purchase price x 0.03 = your needed down payment.
And, above this amount, the minimum down payment needed is just 5% from $548,251 +/- loan amount up to $753,250 +/- loan amount. Just take your purchase price x 0.05 = your needed down payment.
Here's a few down payment needed examples under a $566,000 +/- sales price.
- $300,000 x 0.03 = $9,000
- $350,000 x 0.03 = $10,500
- $400,000 x 0.03 = $12,000
- $450,000 x 0.03 = $13,500
- $500,000 x 0.03 = $15,000
- $566,000 x 0.03 = $16,980
Here's a few down payment needed examples between $600,000 +/- to $793,000 +/- sales price.
- $600,000 x 0.05 = $30,000
- $650,000 x 0.05 = $32,500
- $700,000 x 0.05 = $35,000
- $750,000 x 0.05 = $37,500
- $793,000 x 0.05 = $39,650
The maximum loan amount in San Diego are as follows:
- Max conforming loan amount for a 1 unit is $548,250
- Max super conforming loan amount for a 1 unit is $753,250
- Max loan amount for a 2 unit is $964,300
-Max loan amount for a 3 unit is $1,165,300
- Max loan amount for a 4 unit is $1,448,600
➡️ The maximum debt to income ratio allowed is 50% - that means if we add up the debts on your credit report + your future housing payment / your average gross income (over 2 years) = your debt to income ratio. (video explains better in detail)
➡️ This loan works for for anyone that has a full time job or business for at least 2 years or longer (It's not just limited to first time home buyers, those with limited income, or those with less than perfect credit.)
➡️ The down payment and closing cost monies can 100% come as a gift from parents or another relative, an employer, an approved charity group, or a government home buyer program.
➡️ Being approved with over 40 different wholesale lenders I have a variety of Conventional lenders that require different credit score minimums. But, I have lenders that will go down to a 620 minimum credit score. (although, in full disclosure, a score this low it might be better to go with an FHA loan - as, you might not get approved.)
The waiting periods for the Conventional loan are as follows:
- 4 years from Chapter 7 discharge date
- 7 years if you have a foreclosure
- 2 years if you have a short sale
Let's dive into some typical questions and answers:
❓ Question: Can I use the Conventional loan in conjunction with your down payment assistance program?
Answer - Yes, 100% - that's how it is done. There's a small loan for your 3% down payment, you have a 97% Conventional loan, and together that = 100% financing.
❓ Question: If I have had a Conventional loan before - can I get one again?
Answer: Yes, of course. You can generally have as many conventional loans as you wish. Meaning, primary home, second home, vacation home, rental property.
❓ Question: Why would I go with a Conventional loan over an FHA loan?
Answer: There's no UFMIP with a conventional loan like there is with an FHA loan (video explains). Generally speaking, the monthly mortgage insurance (MI) is also less.
❓ Question: Okay, you have mentioned the positives - what are some negatives?
Answer: I don't really see any negatives at this point. You can use in conjunction with a down payment assistance program, you can put down as little as 3%, you get to take advantage of record low interest rates. I would say the biggest negative is the MI - but, that's misunderstood (video explains better).
❓ Question: If I have just enough for the down payment - is there a way I can get my closing costs covered?
Answer: Yes, we can ask the seller to pay for them in our offer, we can use a lender rebate (video covers), or we can use a combination of the both to limit cash out of pocket.
Here's the cash out of pocket you can expect:
➡️ Deposit - You should count on putting between 1% to 2% of your sales price - as your deposit into escrow - within 3 days of your offer being accepted. This is totally negotiable between the buyer (you) and the seller. I have helped clients with as little as $500 into escrow. But, keep in mind with the low inventory in San Diego, and lots of offers on each property, that's not a likely scenario.
Please keep in mind this is 100% refundable - if it's not used and refunded back at the close of escrow.
➡️ Home Inspection - You *should* use a licensed home inspector to check out the property to understand the kind of shape it's in. Do you HAVE to? No, just highly recommended. Depending on if it's a home or townhome/condo it will be somewhere around $250-$500 +/-.
Keep in mind - you can choose to inspection anything you want. The roof, septic, plumbing, electrical, pool, spa, foundation, etc.
➡️ Home Appraisal - You will need to get a home appraisal on the property since you are getting financing. You pay this directly to the appraiser. This has nothing to do with the buyers agent (me), the listing agent, the seller, the lender, etc. This will be around $500 +/- depending on if it's for a conventional or FHA loan.
My offer to you: If you use my services for the real estate and loan I will credit towards your closing costs at the close of escrow whatever you spent on your home inspection and appraisal as my way of saying "thank you" for utilizing my services.
Basic documentation needed from you (or you and co borrower):
✔️ Copy of your drivers license (screen shot is fine)
✔️ Copy of your social security card (screen shot is fine)
✔️ Last 30 days paychecks (you should get these from your employer via email and PDF each time you are paid).
✔️ Last 2 months bank statements - all pages (You just log into wherever you have a bank acount online and save the last 2 months via PDF.)
✔️ Last 2 years taxes and W2's - If you do not have them you can get them from the IRS website here.
✔️ Latest statements if you have anything like: 401(k), retirement, stocks, bonds, mutual funds, etc
✔️ If you are self employed we will need last 2 years taxes and W2's (if applicable) as well as year to date profit and loss sign and dated (you can do this - doesn't need to be a CPA).
✔️ We can potentially need more depending on this like: pay or collect child support, have been divorced, have had a short sale or foreclosure, have filed bankrupcty, have rental properties, etc.
Here's your steps to begin:
1) Fill out my online application in 10 minutes or less at www.scottsloanapp.com
3) Once I get the needed supporting documents from you I will double check th application, your needed supporting documents, pull your credit report (it's currently $38 +/- and I pay for that), and get back to you with best scenarios.
Here's more San Diego conventional home loan videos below:
What do you think?
Leave me a comment below – or, contact me here.
Your San Diego 3% Down Conventional Insider,