Financing in 60605>Question Details

Baley Bonger, Home Buyer in Chicago, IL

how much is needed these days for a downpayment to qualify for a loan for a mortgage?

Asked by Baley Bonger, Chicago, IL Thu Mar 13, 2008

my husband and I have good credit above 750 and we did put down the 5% down. The condo will not be ready until Oct or November of 2008. There's all this talk with sub-prime mortgages that lenders may require you to put down more. Does anyone know?? I just want to know what we should expect. We did pre-qualify about the end of last year. I'm just worried that something might change.

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3 % downpayment
Some banks they give you $6000 like first midwest Bank (only for first time buyers)
Call Nency at 773-330-3824
0 votes Thank Flag Link Thu May 30, 2013
Baley as it stands now the minimum down payment for a conventional loan ($417,000 or less) is still 5% with no add ons, for a FHA loan (loan amount varies by county) it is 3% , but the guide lines for loans are not set in stone, especially in the current financial environment. The recent changes in the mortgage market (elimination of 100% financing) was due to Private Mortgage Insurance companies refusing to insure such product now.
Speaking as a loan officer, rest assured as long as your credit score stays above 720 you will be fine. Also before you finance any large purchases consult with your mortgage originator. It's best to be prudent it times like these. Good luck & be positive, you can't worry about things beyond your control.
0 votes Thank Flag Link Fri Apr 4, 2008
I'd be careful with that last answer. Consult your score is one thing but you want to have your lender check the zip code that you are purchasing in. That plays a large role in how much down payment as needed. Also the specific property and how long it is on the market can play a factor.

While I don't have a good answer since each area, each property and each person is unique I can say without a doubt to not go off of sombody telling you that you are fine with 5% down unless it is coming from your lender and the underwriter.

Just an FYI.
0 votes Thank Flag Link Fri Apr 4, 2008
With FHA nothing, you can still do ameridream for the 3% down.
Web Reference:
0 votes Thank Flag Link Thu Mar 27, 2008
The way that lenders are tightening there is no guarrantee that you will be able to buy with 5% in November. Many parts of Chicago are now labled as declining markets (there weren't any just a few months back) which means you will need an additional 5% down payment to get the same terms. So if the condo is in a declining market a 5% down payment would be considered 100% financing. This becomes more of a problem because the mortgage insurance companies have announced they will no longer finance 100% loans. So you will need to come up with an additional 5% (10% total) in order to get conventional financing.

FHA is a great option for buyers, but your condo would have to be approved by FHA in order for that to work. Ask the developer if they are going to get the project approved.

Your pre-approval from the end of last year is out of date based on market conditions. It would make sense to talk with your lender and explore other some options, just in case.
0 votes Thank Flag Link Thu Mar 27, 2008
builders, re habbers, home owners, are desperate for buyers
but bank are pretty picky because they lost a lot of money on defaults
doesn't your pre qualification expire at some point?


good luck
0 votes Thank Flag Link Thu Mar 27, 2008

There are still some 100% programs such as Home Possible & My Community. FHA offers up to 97% providing the property is not listed in a declining market. With FHA you can use seller concessions combined with non-profit gift programs such as Ameridream & Nehimia for the remaning 3%. Here are links to my blogs on these subjects.…
0 votes Thank Flag Link Thu Mar 27, 2008
Baley, 5% should be fine, that is the minimum to meet the Fannie Mae guidelines for conforming loans (i.e., the best rates). The only exception could be if Fannie Mae has designated the area you want to buy in as a "declining market" and then they will ask for 10% but this is rare (I am a loan originator and it has yet to impact any of my clients). I would speak to your lender to have him review your file again to be sure. Good luck!
Web Reference:
0 votes Thank Flag Link Thu Mar 27, 2008
Last I heard with a credit score of 750 you need at least 5% down.....but, there was an article in the paper on how it is getting harder and harder to get a loan and lenders look to protect themselves. In some areas it is not 5% but 10%. I've spoken with my lenders and they are saying that we seem to be heading in this direction of 10%.

It looks like no documentation or stated income loans could be a thing of the past but that is a different conversation all together. Here is an article talking about the down payment increases. Looks like you're okay today but closing in October/Noveber coul be a different story. Keep talking to your lender and they should take good care of you.

Good Luck!!
0 votes Thank Flag Link Thu Mar 13, 2008
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