topic Re: FHA Question in Mortgage Loans

FHA Question

Whygohome — Thu, 19 Apr 2012 17:48:29 GMT

Let's say I wanted to buy a house that is 310k but the FHA limit in my area is 271k. I have 20k to put down but that means there is still a difference of 19k. Will lenders or do lenders still go ahead with the financing and just assume the risk on the 19k or is it a hardline anything above the FHA limit you have to come up with out of pocket?

Thanks!

Re: FHA Question

cdtotten — Thu, 19 Apr 2012 18:03:01 GMT

There won't be wiggle room in that area. It is what it is. Anything above you bring cash.

Re: FHA Question

DallasLoanGuy — Thu, 19 Apr 2012 19:29:18 GMT

cdtotten wrote:
There won't be wiggle room in that area. It is what it is. Anything above you bring cash.

yep

Re: FHA Question

Whygohome — Fri, 20 Apr 2012 15:42:22 GMT

Okay, follow up question.

It is my understanding that the FHA requires 3.5% down. Now is that % based on the 271k or the entire 312k?

I am trying to figure out what I would need to bring to the table for a down payment. Now 312-271 = 41k which would be roughly 13% down. Would that satisfy the FHA requirement or would I need that 41k and then 3.5% of 271k so a total of roughly 50.5k?

Thanks!

Re: FHA Question

shawal16 — Fri, 20 Apr 2012 16:36:34 GMT

You need 3% of the sale price.

But like everyone said the max sale price is set in stone. I believe if you put down 20% you won't have to pay PMI. If I'm wrong someone correct me.

Re: FHA Question

StartingOver10 — Fri, 20 Apr 2012 17:35:39 GMT

3.5% min for FHA

5% if you want to reduce your monthly MI payment slightly.

Re: FHA Question

203bravo — Fri, 20 Apr 2012 20:21:18 GMT

Dallas may answer this better - but it is my understanding that you neecd the 3.5% of the limit of 271k which would be 9485. Then you would need the remaining 39000 in cash to gap the difference. So you would need 48,485$ as down payment - then add closing costs.

Re: FHA Question

Whygohome — Fri, 20 Apr 2012 20:46:39 GMT

203bravo that is exactly what I am trying to figure out.

If it's true that really sucks....:(

Re: FHA Question

boomhower — Sat, 21 Apr 2012 14:48:51 GMT

203bravo wrote:
Dallas may answer this better - but it is my understanding that you neecd the 3.5% of the limit of 271k which would be 9485. Then you would need the remaining 39000 in cash to gap the difference. So you would need 48,485$ as down payment - then add closing costs.

That's going to be it. Your just going to have to lower you price range or wait and save more cash.

Re: FHA Question

Student_Loans_Kill — Sat, 21 Apr 2012 23:15:52 GMT

203bravo wrote:
Dallas may answer this better - but it is my understanding that you neecd the 3.5% of the limit of 271k which would be 9485. Then you would need the remaining 39000 in cash to gap the difference. So you would need 48,485$ as down payment - then add closing costs.

That math didn't make sense, and total price would now be $319,000. I was told max loan value is $271,000 thus everything else is cash with LTV

Re: FHA Question

Walt_K — Sun, 22 Apr 2012 00:38:38 GMT

boomhower wrote:
203bravo wrote:
Dallas may answer this better - but it is my understanding that you neecd the 3.5% of the limit of 271k which would be 9485. Then you would need the remaining 39000 in cash to gap the difference. So you would need 48,485$ as down payment - then add closing costs.

That's going to be it. Your just going to have to lower you price range or wait and save more cash.

I don't think this is correct. You need at least 3.5% of sales price, and the max loan amount is 271K in that area. If the sales price is 312K, you need to put down 41K. I don't think you have to put another 3.5% of the 271K down.

Re: FHA Question

webhopper — Sun, 22 Apr 2012 00:44:37 GMT

Whygohome wrote:
Let's say I wanted to buy a house that is 310k but the FHA limit in my area is 271k. I have 20k to put down but that means there is still a difference of 19k. Will lenders or do lenders still go ahead with the financing and just assume the risk on the 19k or is it a hardline anything above the FHA limit you have to come up with out of pocket?

Thanks!

A conventional mortgage would probably fit your needs better, it just has a higher down payment (5%) In your case that would be 15.5k for a 310k house requirement and there aren't any restrictions other than DTI restrictions on how much how you can afford based on your current income and financial obligations.

Re: FHA Question

Student_Loans_Kill — Sun, 22 Apr 2012 00:46:47 GMT

webhopper wrote:
Whygohome wrote:
Let's say I wanted to buy a house that is 310k but the FHA limit in my area is 271k. I have 20k to put down but that means there is still a difference of 19k. Will lenders or do lenders still go ahead with the financing and just assume the risk on the 19k or is it a hardline anything above the FHA limit you have to come up with out of pocket?

Thanks!

A conventional mortgage would probably fit your needs better, it just has a higher down payment (5%) In your case that would be 15.5k for a 310k house requirement and there aren't any restrictions other than DTI restrictions on how much how you can afford based on your current income and financial obligations.

I have the same issue, and FHA is easier to qualify for than conventional

Re: FHA Question

webhopper — Sun, 22 Apr 2012 00:49:53 GMT

Conventional needs a 680 vs a 650...

If you don't have a 680 I guess you just have to make a larger down payment to bring the house within FHA guidelines or choose a cheaper house that you can spend mone on upgrading later on.

My middle score was 681 when the lender pulled it for my final approval before closing on my conventional mortgage... I barely got in, but it can be done!

Re: FHA Question

Student_Loans_Kill — Sun, 22 Apr 2012 00:57:47 GMT

score is not everything...FHA is more derog forgiving? My Tu has 26 derogs, EQ has 20, and EX has 40 ( some must be duplicates)

Re: FHA Question

webhopper — Sun, 22 Apr 2012 01:08:10 GMT

As long as the derogs haven't happened recently, they don't matter, you just have to write a letter explaining what happened. I had a judgement on mine and some lates, but they were all old

Re: FHA Question

Whygohome — Mon, 23 Apr 2012 14:57:22 GMT

I was under the impression that coventional was requiring 20% down these days? I would assume those that higher scores may allow for lower downpayments though.

Re: FHA Question

Walt_K — Mon, 23 Apr 2012 16:03:25 GMT

Whygohome wrote:
I was under the impression that coventional was requiring 20% down these days? I would assume those that higher scores may allow for lower downpayments though.

20% will let you avoid PMI, but it's not a requirement for conventional financing. We didn't look into conventional for other reasons, so I don't have a good sense other than from what I've read on here. But I'm pretty sure you would be able to get conventional going all the way down to 5% down depending on what area you are in. And some people are still reporting success with 80/15/5 to avoid PMI, i.e., 80% first trust, 15% second trust, 5% down.