Financing in Bellevue>Question Details

Starting Over, Home Buyer in Bellevue, WA

FHA loan advice... Wanting to purchase in 6 mos

Asked by Starting Over, Bellevue, WA Mon Oct 1, 2012

We had to short sale our last house over 3 years ago. Prior to that our credit history was impeccable, and that is the only default ever. We had to relocate. So we are starting over. We have no debt, except a student loan payment of 187 a month. Income has increased dramatically since then. So here's my question how much of down payment would be required from us for an FHA, 5,10%, or only 3.5? Credit score for both in low to mid 700's. income 250k house purchase in king county.


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Hello Starting Over,

FHA guidelines allow for borrowers to get a loan after 3 years from the date of a short sale or foreclosure. From the sounds of it you should have no problem with the debt to income (DTI) ratios for a FHA loan. FHA allows 46.99% of your income to go towards a home loan with a total debt load of 56.99%. Depending on your purchase price, a minumum of 3.5% of the purchase price would be required for a down payment. Now, if you choose to buy a home over the lending limits of King County ($567,500) then whatever your purchase price is you have to bring the money down to bring the loan to the loan limits. i.e. $600k purchase price would require down payment over 3.5% to bring loan down to limits. I hope this information helps. I am a licensed loan officer in the state of Washington. We are a national direct lender with access to some of the industries best rates with service second to none. I would be happy to assist you. Please give me a call at any time.

Joshua Lerette - Sr. Loan Officer
Residential Finanance Corp.
0 votes Thank Flag Link Tue Oct 2, 2012
Thank you that makes sense and short sale closed over 3.5 years ago
Flag Tue Oct 2, 2012
They just eased up on rules for FHA and your credit scores are excellent. 3.5% down payment.
King County $567K maximum loan amount. Congrads on improving your situation so quickly.
All your hard work will pay off.
0 votes Thank Flag Link Mon Oct 1, 2012
Hello Starting Over

Pls visit for more resources, and or call me at 425-802-0518. I work with very talented group of mortgage broker that I can arrange for you to meet up with. regards
0 votes Thank Flag Link Mon Oct 1, 2012
Thanks. Ok, so the max is basically 506k. I am looking to put minimums down to save in other areas, such as max out 401k that was depleted during all this 3 years ago, be able to itemize on taxes again, and continue to have savings and save for college for kids.

What's the difference between a conforming FHA loan and and High Balance FHA? Forgive me for being a novice.


Starting Over
0 votes Thank Flag Link Mon Oct 1, 2012
Thanks Rhonda! Trying to maximize what I can buy. Thank you. I am really not worried about a higher rate, just want to get into a house again to build equity and itemize again, :)
Flag Mon Oct 1, 2012
Great questions!
Flag Mon Oct 1, 2012
The only difference really is pricing - the rate is slightly higher (or less rebate) typically than a "conforming".
Flag Mon Oct 1, 2012
$567,500 is the current FHA high balance loan limit, however you can purchase with as little as 3.5% down or as much as you have reasonably available. If you have $100k available (besides reserves & closing costs) you can purchase a home up to $667,500.
Conformming high balance loans are only $506,000, so this may be a better option anyway.
0 votes Thank Flag Link Mon Oct 1, 2012
Rhonda has good advice, 3.5% or 5% work for FHA if everything else is in order. Your scores are great and you have waited the 2 year minimum, so consider looking as soon as you're ready. Rates are incredible right now and hopefully will be in 6 months, but no one knows for sure. Elections can have a lot of consequences.
Congratulations on coming back and doing well.
0 votes Thank Flag Link Mon Oct 1, 2012
Thanks for the replies. Is it still 567k maximum? Any changes coming in Jan?
0 votes Thank Flag Link Mon Oct 1, 2012
The minimum down payment for an FHA loan is 3.5%. Additionally, now that you've passed the two-year mark since the short sale on your home, FHA will allow you to finance using the FHA program. If you would like any additional help please feel free to contact me directly.
0 votes Thank Flag Link Mon Oct 1, 2012
You should only need 3.5% down payment for your FHA loan - 5% down will provide slightly better mortgage insurance premiums.
0 votes Thank Flag Link Mon Oct 1, 2012
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