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Robert Foss
Individual NMLS #697454
Sr. Loan Officer
Specializing in Low Down-payment Jumbo Loans
- 3% Down up to $1,100,000 (must be a first-time homebuyer)
- 5% Down up to $1,250,000
- 10% Down up to $2,000,000
700 Minimum Credit Score Required
3% down…5% down…20% down….it’s all the same interest rate!
Today's Mortgage Rates
30 Year Fixed
15 Year Fixed
10/6 ARM
7/6 ARM
How can we do this?
It’s simple….we are a portfolio lender.
A portfolio loan is a mortgage that a lender originates and retains as opposed to selling it on the secondary mortgage market. When a loan is sold on the secondary market the lender needs to follow THEIR rules so that the loan can be sold. As a portfolio lender, we don’t have to worry about what standards were put in place by Fannie Mae or Freddie Mac (such as down payment, credit score, etc.) because WE make our OWN standards!
How can we do this when other lenders can’t?
In a perfect world, all lenders would like you to have at least 20% equity when you purchase a home. To minimize the risk of this, lenders will require mortgage insurance when there is less than 20% equity. Mortgage Insurance is a “protection policy” to cover the lender should the loan go into default. There are 2 major types of mortgage insurance: Borrower Paid mortgage insurance and Lender Paid mortgage insurance. When a lender is offering a product with less than 20% down but advertises that there is no mortgage insurance, more often than not they are purchasing a mortgage insurance policy on the back end (Lender Paid mortgage insurance). How do they pay for this? It’s simple….they are typically raising the interest rate and using the extra profit to cover this Lender Paid mortgage insurance policy. This isn’t necessarily bad, but keep in mind when Lender Paid mortgage insurance is used you are paying a higher interest rate for the life of the loan.
On the other hand, Borrower Paid mortgage insurance is exactly how it sounds….there is a monthly premium added to your payment on a monthly basis. Assuming good credit, this monthly premium is usually very reasonable. There are two major benefits to Borrower Paid mortgage insurance. The first is that it will allow the lender to offer the lowest interest rate possible. The second benefit is that Borrower Paid mortgage insurance can be canceled once you get enough equity in the property, which means that it will eventually go away leaving you with the lowest possible interest rate for the life of the loan.
EXAMPLE #1: Borrower Paid mortgage insurance Vs. Lender Paid mortgage insurance
$800,000 purchase price with 5% down payment ($760,000 Loan amount) and a 760 credit score:
Borrower Paid mortgage insurance:
$4,255.78 Principal and Interest Payment @ 5.375%
$ 120.33 Monthly Mortgage Insurance (example)
$4,376.11 Mortgage Payment (Plus taxes and insurance)
Lender Paid mortgage insurance:
$4,435.15 Principal and Interest Payment @ 5.750%
$ 0.00 Mortgage Insurance included in interest rate
$4,435.15 Mortgage Payment (Plus taxes and insurance)
EXAMPLE #2: I need a low down payment until I sell my existing house.
This type of loan is absolutely PERFECT for this type of scenario. Assuming the same parameters as the last example - $800,000 purchase price with 5% down payment ($760,000 Loan amount), a 760 credit score AND you are able to qualify for both mortgage payments:
Borrower Paid mortgage insurance:
$4,255.78 Principal and Interest Payment @ 5.375%
$ 120.33 Monthly Mortgage Insurance (example)
$4,376.11 Mortgage Payment (Plus taxes and insurance)
After you sell your existing house, you can then put down enough money to achieve 20% equity to remove mortgage insurance ($120,000 additional funds to make the new loan amount $640,000). Let’s assume that this is done 6 months after the purchase…..You would then be left with a $4,255.78 payment.
But what if you want a lower monthly payment? This is where it gets interesting…..you can do what is called a “Recast”. A Recast is a modification to the existing loan which allows you to “re-amortize” the loan so that your payment will go down. This is NOT a refinance, but just a simple modification without having to do a full refinance at the original interest rate. It will typically cost you about $300 and you would then Recast the loan to create the following payment:
$3,608.35 Principal and Interest Payment @ 5.375% for 354 months (a typical loan is 360 months – this assumes that 6 months have passed).
You get the best of all worlds!
What to expect when working with Robert Foss at Great Lakes Credit Union
Robert Foss has 20 years of experience as a residential mortgage loan officer and is very knowledgeable about a variety of loan programs. Whether you are a first-time homebuyer or a seasoned homeowner, he will walk you through the mortgage process and answer your questions, big or small.
Throughout his mortgage career, Robert has helped many clients secure the financing they need to purchase, renovate, build, or refinance their dream homes. Prior to being in the mortgage industry, his family business was in the residential construction industry – Robert is well-versed in the residential construction process. Because his business is built on referrals, Robert guarantees to make your mortgage experience a great one! Robert currently lives in Lake Zurich, IL with his wife and 14-year-old son. He is a graduate of Northern Illinois University and his passion is hockey. You can always catch Robert at the local rinks late at night playing in the adult leagues!
