Worried about our loan approval. Need advice.

[Anonymous]

So 2 weeks ago we applied for and received a pre-approval from 2 different lenders.  One lender said we qualified for either a Conventional Loan or an FHA and the other lender said we only qualified for an FHA Loan.  We were gifted $15000 from family for a down payment just a few days before we applied for the pre-approvals.  We have about $5000 of our own money as well.  We decided to go with the Conventional Loan lender because the PMI comes off the monthly mortgage payment later down the line.  We just signed a contract on a home and stated we are using a Conventional Loan and the FHA-only lender says that we really can't be approved for a Conventional Loan, based on Fannie Mae rules, since the gift funds haven't been in our account very long.  The Conv/FHA lender says we can go the Conventional route as long as we get a gift letter completed. This is our first home and this confusion is causing us anxiety.  We want to get this clear before closing in mid-May.  We would appreciate some advice please.

[Anonymous]

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@Anonymous wrote:

So 2 weeks ago we applied for and received a pre-approval from 2 different lenders.  One lender said we qualified for either a Conventional Loan or an FHA and the other lender said we only qualified for an FHA Loan.  We were gifted $15000 from family for a down payment just a few days before we applied for the pre-approvals.  We have about $5000 of our own money as well.  We decided to go with the Conventional Loan lender because the PMI comes off the monthly mortgage payment later down the line.  We just signed a contract on a home and stated we are using a Conventional Loan and the FHA-only lender says that we really can't be approved for a Conventional Loan, based on Fannie Mae rules, since the gift funds haven't been in our account very long.  The Conv/FHA lender says we can go the Conventional route as long as we get a gift letter completed. This is our first home and this confusion is causing us anxiety.  We want to get this clear before closing in mid-May.  We would appreciate some advice please.

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 I don't know why that lender is saying you can't use the gifted funds. My parents gave us money as well and all they did was complete a gift letter and we provided the receipts and bank statements showing the deposit, and then a copy of the cancelled check from the gift. This happened after we were already in contract on the house. Long after pre-approvals and all that were done.

[Anonymous]

V   

[Anonymous]

How much of our own funds are we required to put as a down payment on a Conventional Loan?

Sales price = $271,000

5% Down payment = $13,550

Gift from relatives = $15,000

Does Fannie Mae require us to put down 5% of our own funds?  Now our Realtor is getting into this and it's snowballing into a mess.

[Anonymous]

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@Anonymous wrote:

How much of our own funds are we required to put as a down payment on a Conventional Loan?

Sales price = $271,000

5% Down payment = $13,550

Gift from relatives = $15,000

Does Fannie Mae require us to put down 5% of our own funds?  Now our Realtor is getting into this and it's snowballing into a mess.

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This is from Quicken Loans website and it appears that its based on lending laws and not their overlay.

Gift Money and Your Loan Type

One thing to consider is that the amount of gift money you use in relation to how much of your own money you put down may impact what kind of loan you can get. Here are some rules about gift money as it relates to different types of loans.

Conventional

• If you put down 20% or more, it can all be from a gift.
• If you put down less than 20%, part of the money can be a gift, but part must come from your own funds. This minimum contribution varies by loan type.
• You can only use gift money on primary residences and second homes.

FHA and VA

• All of your down payment can be gift money.
• If your credit score is between 580 and 619, at least 3.5% of your down payment must be your own money.
• You can only use gift money on primary residences.

Keep in mind that these rules are subject to change based on lending laws – so check with your mortgage company for up-to-date guidelines.

Read more at http://www.quickenloans.com/blog/gift-money-down-payment#3r8QJsty6o0OmXV3.99

[newstart2010]

We are doing conventional.  $10k is gifted from my mother. $22k is our own.  It could have all been from her, according to my LO, and from whatI have seen it could have all come from her the daybefore.  I'm coming in with a cashier's check from her written to the title company.  and a wire transfer from our bankfor our part.

[Anonymous]

I'm trying to find information on what percentage of the down payment have to be our funds and how much can be gift funds on a Conventional Loan.  Our LO has been great and seems he's competant.  He says what % is our funds and what % is gift funds doesn't matter as long as we get a Gift Letter signed.  Do different lenders have different requirements when it comes to down payment funds source?  The reason we chose this lender over the other was because of the Conventional Loan.  If we had gone with an FHA Loan we'd have chosen the other lender.

[Anonymous]

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@Anonymous wrote:

I'm trying to find information on what percentage of the down payment have to be our funds and how much can be gift funds on a Conventional Loan.  Our LO has been great and seems he's competant.  He says what % is our funds and what % is gift funds doesn't matter as long as we get a Gift Letter signed.  Do different lenders have different requirements when it comes to down payment funds source?  The reason we chose this lender over the other was because of the Conventional Loan.  If we had gone with an FHA Loan we'd have chosen the other lender.

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If you're lender says it doesn't matter, I wouldn't sweat it.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

I'm trying to find information on what percentage of the down payment have to be our funds and how much can be gift funds on a Conventional Loan.  Our LO has been great and seems he's competant.  He says what % is our funds and what % is gift funds doesn't matter as long as we get a Gift Letter signed.  Do different lenders have different requirements when it comes to down payment funds source?  The reason we chose this lender over the other was because of the Conventional Loan.  If we had gone with an FHA Loan we'd have chosen the other lender.

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If you're lender says it doesn't matter, I wouldn't sweat it.

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Sounds good.  And relaxing.  I think I worry to much during this home purchase process.  I did read this a few minutes ago:

Gifts to completely fund down payments always are allowed on federally-backed mortgages such as Federal Housing Administration-insured loans. Until January 2014, however, lending guidelines imposed on conventional mortgages limited the amount of gift money that could be applied to down payments. As of 2014, though, some conventional mortgage lenders have been allowing money gifts to fully cover borrower down payment needs. If you're applying for a conventional mortgage loan, be sure to check with your lender about its own down payment requirements.

I'll just leave it alone then.

[Anonymous]

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@Anonymous wrote:

Sounds good.  And relaxing.  I think I worry to much during this home purchase process.  I did read this a few minutes ago:

Gifts to completely fund down payments always are allowed on federally-backed mortgages such as Federal Housing Administration-insured loans. Until January 2014, however, lending guidelines imposed on conventional mortgages limited the amount of gift money that could be applied to down payments. As of 2014, though, some conventional mortgage lenders have been allowing money gifts to fully cover borrower down payment needs. If you're applying for a conventional mortgage loan, be sure to check with your lender about its own down payment requirements.

I'll just leave it alone then.

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I totally understand the worrying. I did a lot of it when I first went to underwriting, finally my lender told me I had to relax that I was approved, it was just a matter of satisfactorily completing conditions.

So there's the advice. Relax, as difficult as that can be sometimes.