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FHA loans are also a pain in the you-know-what for a seller. The inspection and appraisal has to be a lot more meticulous than a conventional loan. If things are not to code or if there is an extra structure on the property (like a garage, shed or deck) that doesn't have a C of O, then an FHA loan may not be approved. My wife and I had to replace our back door because it was weathered and the paint was stripping in order to satisfy an FHA loan for the buyers.
I beg to differ, as a current seller waiting to close next month, I gave my reasons in an earlier post, why as a seller, a low down payment would make me nervous and I still stand by them. With little money down & low reserves as you point out in your case, the BANK is taking on a risk, that they are no longer willing to take on as readily as they used to. Essentially it is up to the bank who is making the loan. The banks were, to use your words "stupid" but they have learned that the risk is something that needs to be minimized or else we will wind up again in a mortgage crisis.
Some day you will sell your home and I will bet that your inclination is to go with the more qualified person as you may have a home on the other side riding on it and literally can't afford to have any screw ups. In my case, I already own my new home but I am paying expenses there and I am not using the home. Thankfully, it is not for a long period of time, but, it was important to me that the buyer be very qualified.
A appreciate your feedback. With that being said, your assumption that a large down payment makes for a more qualifed buyer is incorrect. Obtaining a mortgage is based on many different factors. What happens if your buyer is financing 50% but is retired and does not have enough income to qualify? what if he is self employed and thinks because he is putting 50% down he should not have a problem getting a mortgage. What if what if what if....bottom line is this, unless i am competing with 100% cash, nothing is guareenteed.
A appreciate your feedback. With that being said, your assumption that a large down payment makes for a more qualifed buyer is incorrect. Obtaining a mortgage is based on many different factors. What happens if your buyer is financing 50% but is retired and does not have enough income to qualify? what if he is self employed and thinks because he is putting 50% down he should not have a problem getting a mortgage. What if what if what if....bottom line is this, unless i am competing with 100% cash, nothing is guareenteed.
I did not say that and I certainly don't need a lesson on mortgages. My response was in the context of the OP and his particular situation, which has zero to do with what you are suggesting with a retired or self employed person. I still stand that if you had a clone of the OP, same money in the bank, time in job, etc. and another buyer putting more down, the bank will take the less risk person every time.
Agreed, all cash is certainly a nice way to close, but as a seller with not one, but 2 all cash offers, I turned both down. Both buyers thought because they were waving the Benjamin's, that meant they could call the shots on a swift close. I am having work done on my new home and I needed the time to get it all done. I would up getting more money and a buyer with a large down payment.
I did not say that and I certainly don't need a lesson on mortgages. My response was in the context of the OP and his particular situation, which has zero to do with what you are suggesting with a retired or self employed person. I still stand that if you had a clone of the OP, same money in the bank, time in job, etc. and another buyer putting more down, the bank will take the less risk person every time.
Agreed, all cash is certainly a nice way to close, but as a seller with not one, but 2 all cash offers, I turned both down. Both buyers thought because they were waving the Benjamin's, that meant they could call the shots on a swift close. I am having work done on my new home and I needed the time to get it all done. I would up getting more money and a buyer with a large down payment.
I realized it after I wrote it and was too lazy to go back and personalize it. My statements still stand and I would even go further and ask if what he states is true (My income and credit qualifications are better than some people putting 50% down.) if he is in the mortgage industry, why is he asking this here, why not go straight to the horse there, who can better explain it.??
He also says he has a loan commitment but also seems to indicate by the opening statement "Whenever we make an offer and we tell the homeowner/listing agent that we are putting 5-10 percent down, there is a huge concern." This seems to indicate that it has been done more than once, I am starting to wonder how much of the original statement is truth and how much of it is just someone looking for back up to what he had been told.
I realized it after I wrote it and was too lazy to go back and personalize it. My statements still stand and I would even go further and ask if what he states is true (My income and credit qualifications are better than some people putting 50% down.) if he is in the mortgage industry, why is he asking this here, why not go straight to the horse there, who can better explain it.??
He also says he has a loan commitment but also seems to indicate by the opening statement "Whenever we make an offer and we tell the homeowner/listing agent that we are putting 5-10 percent down, there is a huge concern." This seems to indicate that it has been done more than once, I am starting to wonder how much of the original statement is truth and how much of it is just omeone looking for back up to what he had been told.
Regardless, what I think is not of any import.
100% truth. go to the horse for what? i am in the mortgage industry, understand risk and i am applying for a fannie mae loan. fannie mae has certain guidelines which i meet. in regards to risk, if fannie mae allows a 95% loan to value and a 50% loan to value, there really is no difference in the risk. given a scenario where someone was putting 50% down but had less than stellar credit or a high debt to income ratio, yes there would be stronger compensating factors than if they were putting 5% down. appraisal is a risk on homeowner which i get but at the same time i am looking at houses where the prospective buyer would most likely be a first time homebuyer with 20% down or less.
100% truth. go to the horse for what? i am in the mortgage industry, understand risk and i am applying for a fannie mae loan. fannie mae has certain guidelines which i meet. in regards to risk, if fannie mae allows a 95% loan to value and a 50% loan to value, there really is no difference in the risk. given a scenario where someone was putting 50% down but had less than stellar credit or a high debt to income ratio, yes there would be stronger compensating factors than if they were putting 5% down. appraisal is a risk on homeowner which i get but at the same time i am looking at houses where the prospective buyer would most likely be a first time homebuyer with 20% down or less.
Your original post.
Whenever we make an offer and we tell the homeowner/listing agent that we are putting 5-10 percent down, there is a huge concern. I am in the mortgage industry and have personally closed fha loans with 3.5 percent down I don't get it. I actually obtained a LOAN COMMITMENT subject to appraisal contract etc not a pre approval which doesn't mean a thing. My income and credit qualifications are better than some people putting 50% down. Appraisal will be an issue for anyone financing as no one likes to pay more than something is worse. Is it the areas I a am looking? What is a first time homebuyer to do??!!
The original post seems to be addressing the fact that you are getting some slack about a lower down payment. You indicate that you have better credit and income than many and are asking if it is the area you are looking in & what is a first time home buyer to do?
This is what I am suggesting that you ask the horse. If you work in a mortgage environment and don't know the answer why not ask a supervisor or coworker?
100% truth. go to the horse for what? i am in the mortgage industry, understand risk and i am applying for a fannie mae loan. fannie mae has certain guidelines which i meet. in regards to risk, if fannie mae allows a 95% loan to value and a 50% loan to value, there really is no difference in the risk. given a scenario where someone was putting 50% down but had less than stellar credit or a high debt to income ratio, yes there would be stronger compensating factors than if they were putting 5% down. appraisal is a risk on homeowner which i get but at the same time i am looking at houses where the prospective buyer would most likely be a first time homebuyer with 20% down or less.
You can ask the homeowners and listing agents why they are concerned.
Are you losing out to other buyers who want the houses who have more money to put down? Or are homeowners/listing agents rejecting your offer even if they don't have another buyer in the wings?
I did not say that and I certainly don't need a lesson on mortgages. My response was in the context of the OP and his particular situation, which has zero to do with what you are suggesting with a retired or self employed person. I still stand that if you had a clone of the OP, same money in the bank, time in job, etc. and another buyer putting more down, the bank will take the less risk person every time.
Agreed, all cash is certainly a nice way to close, but as a seller with not one, but 2 all cash offers, I turned both down. Both buyers thought because they were waving the Benjamin's, that meant they could call the shots on a swift close. I am having work done on my new home and I needed the time to get it all done. I would up getting more money and a buyer with a large down payment.
But you will only be in contract with one party so the bank won't have to choose. You accept offer, buyer qualifies, you sell. You decline offer despite having no other offer, your house rots on the market, buyer moves on and buys from a smarter seller.
Whenever we make an offer and we tell the homeowner/listing agent that we are putting 5-10 percent down, there is a huge concern. I am in the mortgage industry and have personally closed fha loans with 3.5 percent down I don't get it. I actually obtained a LOAN COMMITMENT subject to appraisal contract etc not a pre approval which doesn't mean a thing. My income and credit qualifications are better than some people putting 50% down. Appraisal will be an issue for anyone financing as no one likes to pay more than something is worse. Is it the areas I a am looking? What is a first time homebuyer to do??!!
The original post seems to be addressing the fact that you are getting some slack about a lower down payment. You indicate that you have better credit and income than many and are asking if it is the area you are looking in & what is a first time home buyer to do?
This is what I am suggesting that you ask the horse. If you work in a mortgage environment and don't know the answer why not ask a supervisor or coworker?
How the heck is someone in the mortgage industry going to explain your flawed rationale? I'd rather ask you. And it proves the answer is stupid people.
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