Hi. I'm looking at purchasing a single family home in Austin soon that we will occupy. Depending on which property we choose, we might be able to simply take out a conforming ($417K) 15-year loan or need to bump a bit higher (e.g., $500K). Down payment would be >$200K, so it'd be under 75% LTV either way. Credit rating is superb and income is well above what's needed to qualify.
My question is regarding the situation where I want to borrow over $417K. Is it best to simply do a jumbo? Or separate first ($417K) and seconds (remainder)? I seem to recall that Texas has somewhat unusual rules regarding mortgages, and it was only fairly recently that second mortgages and LoCs were legal in Texas due to components of the Texas constitution that limit the ability to foreclose on somebody's primary residence.
On a related note, which I hope is ok to ask, does anyone have suggestions for a specific broker/lender, should I need to go the jumbo/second route? For my last four or five purchases/refis, I've just used Provident (low rates, extra .25% credit due to employer, simple).
Actually, Texas only has unusual rules on home equity loans. Second liens have always been available.
I find it is best to avoid jumbo financing and go with a conventional first lien and a second lien for the remaining amount.
Perhaps the best answer on whether to choose a jumbo vs a first and second is to count the costs of each loan. Take a five year mortgage holding period - just to keep it simple - and look at the closing costs, loan fees and points and interest rates. Over the next five years, which loan is the best financial option?