Mortgage or Bank for a first time HOME BUYER??

Question

So right now I am a bit in a predicament because I don't know whether to choose a mortgage lender or a bank for a home loan. The reason why I'm leaning towards going with Chase bank for a home loan is because they allow for me to put 15% down instead of the opposed 20% for a conventional loan and the house I'm under contract with qualifies for a $5000 grant as a first time home buyer (meaning that Chase Bank will cover $5000 of all fees) Which is a HUGE BONUS. I did the Math and I end up saving over $9,000 as opposed to going with the mortgage company. Now the mortgage company isn't as flexible and does not allow me to put down 15% because I was told that it would NOT work. And I know what you're thinking "why don't you just do FHA" while that is 100% true I cannot because it just Simply wouldn't work for this house. I ran the number for the house I'm under contract with and they are great. Overall great property. So Chase Bank sent me a Pre-Approval and these are the terms and I want to get your thoughts.

Mortgage Type: Conventional 30 year Fixed

Interest Rate: 6.625%

Points: 1.033%

Apr: 7.077%

15% Down

$5,000 in credit towards Total Fees

** REASON WHY I WANT TO PUT LESS DOWN IS TO HAVE MORE CASH RESERVES IN CASE ANYTHING GOES WRONG**

Mortgage Type: Conventional 30 year Fixed

Interest Rate: 6.625%

Points: 1.033%

Apr: 7.077%

15% Down

$5,000 in credit towards Total Fees

** REASON WHY I WANT TO PUT LESS DOWN IS TO HAVE MORE CASH RESERVES IN CASE ANYTHING GOES WRONG**

Stacy Raskin · Answer

@Abner Sanchez, what state do you live in? I think you can get a better rate and also put 5% down if you work with a mortgage broker. Banks and retail lenders will always charge more than a broker for various reasons including higher overhead.

Dennis Nguyen · Answer

^ yes to what the others have mentioned. If your goal is to put less down to have less cash reserves, definitely look into other programs that allow you to put as little as 3% - 5% down on a property for a conventional loan. When I bought my house a few years ago Guild Mortgage had a program that also gave down payment assistance for first time home buyers. Not sure if they still offer that but doesn't hurt to look into!

Jay Hurst · Answer

@Abner Sanchez   You can actually put as little as 3% down for a conventional loan, and if you credit is good, the rate and the 1.033% in points is not a very good deal with 15% down. Should be able to do better with 5% down.  Of course you still have to be able to qualify from a debt to income perspective when you put less down.

Kass Farran · Answer

Will you be living in this home? You can go as low as 5% down on conventional if its your primary. I know a lender than could prob get you a better rate too.