Chris Graves, Certified Mortgage Advisor

Providing Mortgage Services in MA, NH, ME, RI and FL

Home / Misc Topics / 95% Financing with First and Second Mortgages | MA Home Buying Tips

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95% Financing with First and Second Mortgages | MA Home Buying Tips

First and second mortgage combinations are back and can be a huge help for buyers looking to avoid PMI or exceed conventional loan limits. It allows home buyers to put as little as 5% down on the purchase of a new home. If you are on the market to buy a home, here’s why you should consider 95% financing with first and second mortgages.

Avoiding PMI

Most loans for more than 80% of the purchase price require PMI charges. Homebuyers can avoid this by obtaining two mortgages. The first would be for 80%, thus staying below the PMI threshold, and the second for 15%. This results in only a 5% down payment for a buyer and no PMI charges. Many buyers assume that you cannot obtain more than one mortgage when buying a home, but these programs do exist.

Financing High-priced Homes with Little Money Down

Another great way to use this program is for the purchase of high-priced homes with little money down. Conventional loan programs have mortgage limits based on the county. For instance, in Suffolk County, the limit for a conventional loan is $603,750. If you are looking to purchase a property in Boston, that would be the most that you can borrow. Boston home prices easily exceed one million dollars, thus Boston buyers must often provide significant down payments.

By using 95% financing with first and second mortgages, a buyer can avoid that large down payment. A second mortgage can be granted for as much as $500,000. This allows buyers to purchase a home for as much as $1,161,842 with only 5% down. The first mortgage would be issued for $603,750 (the conventional limit) and the second mortgage for $500,000, leaving only $58,092 as a down payment.

More on 95% Financing with First and Second Mortgages

With interest rates still historically low, buyers may want to keep their down payments low in order to have funds available for other things, like home repairs, paying off higher interest loans, or investing in the stock market. If a low down payment is appealing to you, contact Sierra Pacific Mortgage for more information on 95% financing with first and second mortgages. And if this loan program doesn’t fit your needs, we have many other options to consider. Contact us today for a free pre-approval!

 

Chris Graves's avatar

Chris Graves

I grew up in Massachusetts, spent the majority of my young adult life in Boston, and own a home in Windham NH. I have owned properties in MA and NH. I specialize in mortgage lending in Massachusetts and New Hampshire and my company does have the ability to lend in other states. I graduated from the University of Massachusetts in Amherst Massachusetts in 2002. I have a Bachelor’s in Science. In addition to managing a team of loan officers my personal loan production is always in the top of the entire of company. I have personally been in the mortgage business for over 13 years. I pride myself with taking my clients from application to close in the smoothest and quickest way possible, while keeping them well informed during the entire process. I originate my own loans from start to finish and work hand in hand with my loan processors & underwriters to make sure I am updated to the minute with all of my files. I stay up to date with lending guidelines and speak with underwriters on a daily basis to ensure I am aware of all of the lending guidelines in place.