down payment confusion

fozman68 · Joined: 14 Nov 2007 Posts: 24 10.49 Dollars($)

FHA down payment everywhere says 3% down. I saved up $7500 so that I can purchase a home, and I'm told I don't have enough. Its actually 3% plus closing costs!
any help?

larry · Joined: 27 Jun 2007 Posts: 3245 460.30 Dollars($)

Hi Fozman,

Yes you will have to pay 3% down payment and then closing cost but you can also ask your lender to include the closing in you mortgage amount and see what he says about it.

Feel free to ask if you have any further questions.

Thanks,
Larry

Caron

Hi Fozman,

The minimum down payment requirement was intially 3% but in Dec, 2007 the senate has approved a bill due to which some lenders may offer loans with a 1.5% down payment only. And it doesn't include the closing costs. At least 6% of the closing costs can be paid by the seller as per the FHA guidelines.

You may even consult some more lenders and find out what down payment they require you to pay. Our community has a number of FHA approved lenders helping people with mortgage advice and loan offers. You can talk to them and see what rates they can offer you.

If interested, you can send in your request for mortgage quotes along with the minimum details to our community lenders. Know what happens after you request for mortgage quotes .

good luck

jeffselan · Posted: Wed Feb 20, 2008 5:23 am Post subject: Partially correct.

FHA requires a 3% buyer commitment, not down payment.

A certain portion (3/4%) of that commitment can be financed as an origination three quarter point.

Also, down payment and closing cost may be paid by the seller if the sales contract is worded correctly.

The truth is, all moons aligned correctly, you "could" purchase a home with as much out of pocket expense for the appraisal and your first years home owners insurance.

I have read that certain portions of closing costs may be used as part of the buyer 3% commitment but truthfully, I have not done one where I needed to be that complicated.

All bets are off in about 30 days when the new FHA rules come into effect.

charlesarmbruster · Posted: Wed Feb 20, 2008 11:30 am Post subject:

Certainly, your closing costs can be taken care of by the seller -- speak with your realtor to make an addendum to the Sales Contract.

Saving money is one of the hardest things that we can do -- it is tough, sometimes. I remember saving money for our Wedding! It was not enough, as most everyone will understand....there's always something else needed or wanted!!!!

When transitioning to homeownership, borrowers should try to anticipate the worst and be pleased when they get results which are to their advantage -- since we aren't aware of our credit situation as well as we should be, and since we really don't know what the home will actually appraise for, we shouldn't anticipate a 'best possible scenario'.

Always try to have more set aside than you need to make the transaction! GOOD LUCK!!

lisascherzer · Joined: 04 Jan 2008 Posts: 599 69.58 Dollars($)

Did the lender you apply with tell you if you qualified for an FHA loan? Or were they just charging too much for closing costs? There are are many low and no down payment options other than FHA so I would keep shopping around.

fozman68 · Joined: 14 Nov 2007 Posts: 24 10.49 Dollars($)

Hi Lisa, my lender is saying I'm within the FHA guidelines, but that it's up to the underwriter. I really don't think I would qualify for anything else. See my other posts.

gmakerley · Posted: Thu Feb 21, 2008 10:14 am Post subject:

there may be more here than meets the eye. since we don't know the entire story of this loan application, the best we can do is speculate.

my speculation - your lender's underwriter wanted to see reserves, which you likely had not provided documentation for. you did not note whether or not the seller of the property is forking over any funds towards your closing costs - if not you may truly be short in terms of funds needed.

you also didn't mention your credit standing, nor your debt ratios. if either or both of these items are slightly off, it will impact how the underwriter views your assets.

truly, you are best served at this time to find out just what would impress the underwriter sufficiently to get your loan approved; then go out and find those funds (don't borrow, however).

gmakerley · Posted: Thu Feb 21, 2008 10:32 am Post subject:

as you had suggested to lisa, i just read all your other posts, fozman.

i guess you've been put through the wringer for a few months now. i hope you didn't move ahead and do anything with that credit restoration service. as you said, you can do the same thing yourself and not have to pay them to do it.

having read all your posts about the bankruptcy filing and the dates made my head spin. i'm still not sure i am clear as to when your bankruptcy was completed.

a credit score of 610 is generally acceptable with fha financing. if you can get past the bankruptcy/foreclosure issue, i would think you'll have a decent shot at being approved. according to your previous posts, your collection record has now been erased, right?

0.10 Dollars($)

Hi George, Bankruptcy was dismissed 11/06 (not discharged) And I havn't been put thru the wringer either. I knew this would not be easy, I started early. The time is NOW though. I didn't use any credit restore company's either. I was able to remove a couple of things myself. I beleive the foreclosure thing is behind me at this point. It shows as a foreclosure, but I have the HUD1 form from settlement, as well as a letter from the mortgage company, showing paid in full. The company just won't do anythhing with whats on my cr. report. I have not showed any lates of any kind since Nov. '06 except for the mortgage lates in 11/06, 12/06 and 1/07 and 2/07. That is the last one, before sold the house.
the debt ratio's are well within FHA guidelines. The issue at hand right now is, established new credit. I have a car loan from 11/06, never late and 2 credit cards, never late. cr.cards are only 9 months old and 4 months old.
I just sent in my final letter to the underwriter today, explaining why I went into bankruptcy, what my rental history has been over the last year, and explained everything on my credit report.
I just wanted to make sure, that if I got the approval, how the down payment would work. I think I received my answer here, and I thank everyone.
If Soverign Bank turns me down, I am not giving up. I will be looking for someone to approve me.
thanks for listening and for your advise.

fozman68 · Joined: 14 Nov 2007 Posts: 24 10.49 Dollars($)

forgot to sign in,
fozman68

gmakerley · Posted: Thu Feb 21, 2008 1:58 pm Post subject:

thank you fozman, for reducing my confusion. based on all you have just related, your loan ought to be approved. period.

that the bankruptcy was dismissed eliminates it totally from consideration, in my view. with mortgage late most recently being 2/07, that is a full year and should not adversely affect you.

i think you've done what you needed to do, and a sensible underwriter (they do exist!) ought to approve the loan and move you toward closing.

i trust this will all pan out as planned.

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