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How a low down payment, Elite Access jumbo loan helped the Lorenzo Family

The Lorenzos

Are you considering home ownership but feel your only option is to rent? Is that because the price of the house you want exceeds the limits of most mortgage loan programs that allow low down payments? Or is it because you had a negative experience that impacted your credit rating in the past? If you answered yes to any of these questions, you should meet the Lorenzo family.*

A job loss and its consequences

Joe Lorenzo was excited about his new career opportunity. He had been offered a promotion with his company that would increase his income and enable him to do more for his family.  However, that promotion also meant a big change - relocation to a coastal town far away from their current home.

He and his wife Maria had been raising their two children, Gabriella (age 12) and Victor (age 4) in their rented home outside of Chicago. They moved in just before the birth of Victor and just after Joe had lost his job.  The Lorenzo family had to leave the home they had built together. They were unable to keep up with the mortgage payments with just Maria’s income. Their beloved home of 13 years was sold as a short sale so the Lorenzos could avoid foreclosure.

Limited funds and a short sale?

Since that time, the Lorenzos had worked hard to improve their credit rating and increase their savings.  In just a few years they had $50,000 in savings and other liquid assets. However, their limited credit history had not improved significantly by the time Joe’s promotion came through.

In addition, the cost of housing in the new city was much higher than where they currently lived. That meant that their $50,000 was less than ideal for a down payment in high cost areas, where Jumbo loans for amounts over the conforming loan limits are common. So, when it came time to decide if they would rent versus buy a home when they relocated, renting seemed like the only option.

But, Maria had already found a perfect home on the market on in an excellent school district. It was priced at $725,000. Since the Lorenzos had purchased their previous home with an FHA loan, they realized that if they could find a mortgage with similar low down payment options, their savings might be enough. So Maria called a real estate agent friend for advice. The friend explained that the amount they wanted to borrow usually requires Jumbo loan financing. And those loans typically require more of a down payment.

Maria’s heart sank.  The house was minutes from her kids’ new school and had a beautiful backyard.  It was on a quiet street so her kids could ride their bikes without her worrying, too.  “Is there no other option?” Maria asked her friend. It was then that Maria first heard about Portfolio loans and Caliber Home Loans, Inc.

Putting more people in more homes

Caliber is a national mortgage lender who saw a need for more people to be able to realize their home ownership dreams. The company knew there were people with the ability to repay a mortgage, but still were being turned away by lenders. Whether it was for a past credit issue or limited funds for a down payment, many people could not find affordable mortgage financing. In response, Caliber created a suite of portfolio loan products that helped more people get into more homes - people just like the Lorenzos.

After sharing this news with Joe, the Lorenzos found a Caliber branch not far from where they were moving and made the call. Their Caliber Loan Consultant was able to take their information over the phone, and quickly gave them some good news. Just as Maria’s friend had thought, home ownership was not out of the Lorenzo family’s reach after all!

Elite Access is the answer

The Loan Consultant explained that the FHA High Balance loan limits were too low for the home Maria wanted to buy. Also, the traditional low down payment jumbo loans would require the Lorenzos to pay almost 10 to 15% down. Since the Lorenzos needed a loan with a 95% loan to value (LTV) ratio based on their current income, assets and debits, Joe and Maria would need to utilize the funds in their retirement account to meet the reserve requirements for a mortgage.

Joe’s response: “So we need to find a cheaper, smaller home. Is that what you are saying?” Maria’s heart sank again. “No. We can help you buy the home you said you wanted,” replied their Loan Consultant.  

Welcome back to home ownership

The Lorenzos re-established credit rating, ability to repay, and sufficient funds to make a 5 percent, limited down payment made them perfect candidates for Caliber’s Elite Access portfolio loan.  With Elite Access, the Lorenzos received the 95 percent loan to value (LTV) loan they needed at an affordable interest rate. And, they also benefited from not having to pay mortgage insurance (MI). Usually, loans with low down payments require the borrower to pay MI as part of their monthly mortgage payment. Elite Access requires no MI, which could save the Lorenzos thousands over the life of their loan.

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