Piggyback loan 3.5 years post short sale? (PMI, credit report, fees, requirements)
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We short sold a house 7/2010 and are ready to purchase again. We were told we could do a 79% first and a 10% piggyback loan on a $545k house. This would help us avoid the 80% max LTV and avoid PMI. Does anyone have feedback on this option or can recommend a mortgage broker/lender/etc. who offers this? We have good credit and good income. May also qualify for extenuating circumstances on the short sale.
The problem you will encounter is the second trust requirements are actually tougher than the first trust. Where are your scores?
The second issue will be the first trust will be what we refer to as an Agency High Balance (over 417K) and finding an investor to take your loan within 5 years of a short sale (some are actually 10 years) with a CLTV of 90% is going to be tough (Note: I didn't say impossible, but very hard). If your payments were late at the time of short sale, your road will be difficult and be sure to question anyone that is overly optimistic. You are the one paying for home inspection fees, appraisal, and HOA questionnaires - this adds up. Personally, I suspect FHA would be the recommended route for your situation.
What about reducing the 1st mortgage to $417k to avoid jumbo? Our scores are 700+.
The FHA limits in our area are too low for those programs to work for us.
I used the wrong #s in my first post. The 79% 1st mortgage was when we had a $525k purchase price. It would go down to 76% on a $545k purchase (whatever it takes to limit 1st to $417k and avoid jumbo). Does that make any difference?
You will definitely have an easier time with a 417k application, but I fear any 2nd trust requirements will exclude you. They really are tough because when "things" hit the fan, seconds are rarely paid back (just to give you some of the reasoning).
Your lender needs to see if they can get an automated approval, which will depend on how that short sale is coded on the credit report (any why I am asking if it was late prior to short sale). Without an automated approval, it will be a tough battle. Also, due to your history, you will face scrutiny like you never have experienced before. Toughen up and get your ducks in a row. I promise you the lender is not happy about the current process, either.
Most that I know cannot help you and that is assuming the motgage(s) were not late at the time of short sale. FHA is the only way I know to make that work and you said the limits are well below what you need. What county & state are you in?
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