RING RING, now who is calling me this early on a Friday morning...... 

"Good Morning, Major Mortgage How can I help YOU?"  Oh Hi Lenn ,

 .....  (you will only hear my side of this conversation since I hate speakerphone) 

 .....  You have an interesting scenario there Lenn, wish I had them here in Colorado, I would love to do this loan......  My thoughts on a loan for this couple.....

Ok, First thought is always FHA, but we didn't add PMI to this and that will add (quick calculation) about 230 bucks to the payment.... The ratios are a tad high, but just last night we ran one with ratios of 42/55.8% and got an automated approval, so without knowing anything about their debt and I will guess if they have been able to save 10% they probably are carrying very little debt FHA is a good way to go for them, BUT.... You said they make over 120 grand a year..... so the PMI will not be tax deductible for them (check with you tax professional, but PMI is deductible up to an income level of $110,000 I believe)

Now we can look at combos and what not but how about this

LPMI

(Lender Paid MI)

We can go to 90% one loan

The rate this morning is 6.875%  for a payment of

$3579.99 plus $100 for insurance and $500 for taxes for a total of $4179.99 a month

VS

$4045 plus PMI of $230 for a total of $4275 a month.

Giving them a small savings of almost a $100 bucks a month

Now, I have made a few assumptions..... that they have a little more than the 10% saved for closing cost and while not needed with this investor, I would hope they have some reserves.

Well, Lenn it was great visiting with you.  Good Luck with your buyers and have an awesome day and weekend.