To All You realtors...Question?

We just bought a home this past fall we had to put 3.5% for FHA and 5% for a conventional. Good luck!!!!

He is completely incorrect. FHA loans require only 3.5% down, and USDA loans are still offered with no money down. The best rates are usually available with only 20% down, but deals are available also with 10%. Loan programs are out there with 5% cash, 15% 2nd mortgage and 80% first mortgage.

FIL is wrong. Banks historically look for 20% but they do have programs that don't require that much.

You may consider dealing with a reputable mortgage broker instead of a bank. You will want to get preapproved before looking for your home. You will want to do that when you are closer to actually buying. If you get more than one company to preapprove you which I would recommend, let them pull your credit report within one week of each other. This will only count as one incident of someone looking at your credit. People looking at your credit negatively impacts your credit.

You don't want to borrow the full amount you will be approved for and it is a very good idea to still have plenty of money in the bank after the closing.

FIL was just bluffing and doesn't have a clue as to what the heck he is talking about. Know more for yourself and you won't be fooled by anyone.

Unless he's got a time machine, I'm not sure how he would know what will be mandatory by all banks a year from now, right? I can tell you with 100% certainty that my sister & her husband just went to closing last week on a home in NJ & they did not have to put even 20% down on the home. Granted, they've got stellar credit, but still, they are first-time homebuyers. I'd say he's hoping you'll be better safe than sorry & save up a big chunk of money to put down (or at least have in the bank to show whoever you choose to finance through), but that it likely won't be mandatory.

The best answer is to contact the bank you hope to use and ask them what they offer. I went through my credit union and had nothing to put down. The only thing we had was our closing cost. They worked it out so that we had a 80% and a 20% loan. This stopped us from having to pay the PMI. I don't know if this is still an option or one you would want to look into. Good Luck on purchasing your home.

I havent heard that. The amount down depends on the bank and the type of loan you have.
I would get in touch with a realtor, they can refer you to a trusted loan officer that can answer any of your questions.
I wouldnt rely on FIL for financial info. ;)

Some banks require 20% down with proof of another 10% in cash in an account somewhere at closing. So maybe that's where he's coming up with the 30%. I've never heard of a bank requiring THAT much as just down payment. 20% seems to be pretty common, though. Make sure you do your own research and talk to several lenders about their programs before you decide. And don't just go on what your FIL says.

I am a REALTOR in Denton County (just north of Dallas). The information your FIL gave you is incorrect. It depends on the type of financing you are planning on getting. You can move in with as little as 0 down (with USDA financing, but you are restricted on areas and price). FHA you can move-in with as little as 3 1/2% down. If you go conventional, it ranges from 5%-20% for the loans I have seen, there are many factors that affect that, so you would need to speak to a Loan Officer to get exact details for your situation.

I have a great Loan Officer that you can contact for details or further questions. Her name is Traci Voss and her number is ###-###-####.

Please feel free to contact me if you have any questions, or if I can assist you in finding your new home.

Sincerely,
K. M.
RE/MAX North Assoc III
###-###-####
____@____.com

Unless miraculously already knows what bank you will be using for your financing and what rules/regulations will be in effect at the time you close your mortgage, I don't know how he could POSSIBLY know what he has said.

However, to avoid PMI (private mortgage insurance, that only benefits the bank and NOT you, but YOU have to pay for), most lending institutions require that there be 20% equity in the appraised value of the home. It might mean you put 20% down, or it might not---depending on the asking price of the home, and the appraised value.

Do your own research. You will be glad you that you understand everything on your own, and be more comfortable with your decisions later on if you do.

I live in the DFW area and I can't imagine this is true - but I'm not a realtor. We bought a house 5 years ago and didn't have to do this, or the one before.

I'm not a realtor, but I believe Freddie Mac/Fannie Mae is now requiring it, especially for certain credit scores. Not all banks are on the same line yet though. I know 2 people that have closed on homes in the past month. One was a Fannie Mae loan and had to have the 30% but her score was something like 710 (remember when that was a great score?) and the other had a score of something like 820, putting 20% down. I am not sure but I think I heard that the 30% she had to put down was not actual money down but loan to value and the property was purchased for less that appraised (foreclosure).

Thats a bit high. The banks now require at least 5% down and more if it is a short sale, foreclosure or second home. Some banks are making it very difficult to borrow since they (the banks) are partly to blame for the housing mess we are still in.

I wouldn't worry about what he says. The market will get better eventually and the more you put down the lower your payment will be.

I am not a realtor. But last year we were considering selling our home and buying a new one here in Keller. We met with at least five real estate agents, trying to find a good match for us. My husband is pretty versed on this subject and didn't ask too many questions. Since we were considering buying a new house before the old one closed, I asked how much we would need to have saved. The standard answer was 20%, but many also said 30% was also being asked by many banks after all the issues with housing in the past. So it's possible your FIL was not too far off on this one.

That sounds high, but I'm sure it depends on what kind of financing you want. My dad is a realtor in the Dallas area; I'm sure he'd be happy to answer whatever questions you have so you know for sure! His name is David Bush and his number is ###-###-####.

The only time you would need that large of a down payment is if the loan you are looking at is from a Hard Money Lender (collateral-only loan - think really bad credit). Therefore, no, he is wrong. I am licensed in mortgage for 13 years and Real Estate. The banks are still lending at 3.5% down for excellent rates. I would encourage you to look at other lenders besides the big banks though. You're likely to get a better rate, lower costs, and MUCH faster closing than the big boys.

Is he The Amazing Kreskin or something?

I suspect he wants you to be able to keep your payments down. And it IS always a good idea to out as much down as you can to avoid PMI.

Ask someone at the bank--better yet, check out the little chart of mortgage rates in the paper each week to see what types of loans require what kinds of things.