Posted on: 03rd May, 2008 09:48 pm
Hello,
first time user here and soon-to-be first time homeowner. Here's my question:
I've been approved for a FHA ensured mortgage through Wells Fargo. I applied over the phone, recieved the mortgage package, filled it out and submitted and got my pre-approval letter back the next day. the loan I was pre-approved for was assuming my available funds would be 20% down on the loan.
However, after reading about FHA mortgages, I realized that the FHA only requires a 3% down payment. Of course, I know the advantages of the 20% down, no PMI, etc.. BUT: does this mean that I don't necessarily have to put down all 20%? this is really limiting how much home I can buy, apparently, I qualify (income-wise) for much much more. but my down paymet is limiting me.
So, who determines what my minimum down is? Wells Fargo, or the FHA?
Many thanks for the responses
first time user here and soon-to-be first time homeowner. Here's my question:
I've been approved for a FHA ensured mortgage through Wells Fargo. I applied over the phone, recieved the mortgage package, filled it out and submitted and got my pre-approval letter back the next day. the loan I was pre-approved for was assuming my available funds would be 20% down on the loan.
However, after reading about FHA mortgages, I realized that the FHA only requires a 3% down payment. Of course, I know the advantages of the 20% down, no PMI, etc.. BUT: does this mean that I don't necessarily have to put down all 20%? this is really limiting how much home I can buy, apparently, I qualify (income-wise) for much much more. but my down paymet is limiting me.
So, who determines what my minimum down is? Wells Fargo, or the FHA?
Many thanks for the responses
The answer could be both. FHA requires a 3% commitment by the buyer. However, the 20% down might have sweetened the deal for an approval.
The thing is this. FHA has requirements to insure the loan.
The bank has requirements to give you the loan.
So you may have stipulations form the bank or FHA or both.
Explore your options with the standard amount down and see what works best for you!
I hope that helps!
The thing is this. FHA has requirements to insure the loan.
The bank has requirements to give you the loan.
So you may have stipulations form the bank or FHA or both.
Explore your options with the standard amount down and see what works best for you!
I hope that helps!
Hi aviator,
Welcome to the forum.
I agree with jeffselan that on FHA you can make 20% down or even 3%. If you go for 3% down payment so that you can get a higher loan amount can you afford the monthly mortgage payments? People take out larger amount than what they can actually afford and later on faces problem. So think twice how much can you afford.
Best of luck,
Larry
Welcome to the forum.
I agree with jeffselan that on FHA you can make 20% down or even 3%. If you go for 3% down payment so that you can get a higher loan amount can you afford the monthly mortgage payments? People take out larger amount than what they can actually afford and later on faces problem. So think twice how much can you afford.
Best of luck,
Larry
Good Advice Larry.
Becoming a home-owner is a bit step, and living within your means and being able to comfortably afford your lifestyle is key to avoiding problems down the road. I would say to use the mortgage calculators and determine what you can comfortably afford with all your monthly expenses. After that, you will have a better idea how much of a mortgage you can get. With that said, I would keep within your means, get the 3% down, and use the other money to ensure that you will ease into your new lifestyle as a home owner.
Disclaimer: I am only a friend offering advice.
Best of Luck, and Congratulations
Becoming a home-owner is a bit step, and living within your means and being able to comfortably afford your lifestyle is key to avoiding problems down the road. I would say to use the mortgage calculators and determine what you can comfortably afford with all your monthly expenses. After that, you will have a better idea how much of a mortgage you can get. With that said, I would keep within your means, get the 3% down, and use the other money to ensure that you will ease into your new lifestyle as a home owner.
Disclaimer: I am only a friend offering advice.
Best of Luck, and Congratulations