7 Mistakes To Avoid When Buying Your Next Home – The Second Mistake


Buyer Mistake #2 To Avoid:  Down Payment Source & Amount Challenges
The second buyer mistakes revolves around not having the right amount for down payment or having enough not from the right sources for a lender approval.
Make sure your down payment funds match your financing choice. All too often buyers start their purchase only to find that either where their funds are coming from or how much they think they need does not match what is allowed to get financing.  Conventional typically wants 10% down even thought guidelines say that you can qualify with 5% down.  The catch 22 here is that most banks cannot get a borrower’s Private Mortgage Insurance or PMI approved to insure their loan which is needed if you do not have 20% down payment.  This get discovered down the approval road and can cause the deal to go south and if there is a back-up contract, then you may lose the house you looked hard to find. 
Also you may have enough down payment, but the account it is coming from is not acceptable for a lender approval.  An example would be funds from a business account, cash or gift money that is not allowed per the type of program you are looking to get funding with to close your house.
Tip- FHA allows gift funds so most of the time you are covered, but Conventional financing requires that the funds to close be your funds in a personal account for 60 days or more.
Contact our team of specialist today to see the options available to you that can save you thousands and even more importantly choosing the best program to get you to close without last minute stress.
Dave Ramirez

Comments are closed.