Home Buying in 90623>Question Details

Peaceandpow…, Real Estate Pro in Hurd, ME

What's a good down payment to have?

Asked by Peaceandpowerparenting, Hurd, ME Wed Dec 5, 2012

Lets say you get an FHA loan, have good credit, waited 2 years after a short sale...what do you realistically need on a $600,000 house to keep the payments under $3,000?

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You're getting some misleading info here. You only need to wait 3 years from the SS date IF you were late on the mortgage in the 12 months prior to the SS, if you were not late you could be eligible the next day for an FHA mortgage.

As far keeping your payment under 3k, your best bet is to go conforming with 20% down and here's why. On an FHA loan with 3.5% down, your principle and interest payment would be $2,563.94 plus the FHA MI (mortgage insurance) $717.15 so you're already over 3K without including takes and insurance. In order to get your payment down to 3K you would need to put down at least 20% down depending on taxes and insurance. The problem with FHA is even with 20% down, you're still going to pay MI and that adds around $480 to your payment so if you go conventional w/ 20% down you're going to save yourself at least $400 per month plus you'll save the FHA upfront mortgage insurance premium of 1.75%.
1 vote Thank Flag Link Thu Dec 6, 2012
With FHA guidelines, you can qualify with as low as 3.5%. If you qualify under conventional guidelines you can put as low as 5% down payment. Qualify with a lender to understand all your options.
0 votes Thank Flag Link Tue Jul 22, 2014
higher down payment is always good to keep the monthly payment lower. For conventional loan anything below 20% will have PMI and PMI can be expansive.
0 votes Thank Flag Link Sat May 3, 2014
20% down will get most lenders to work with you. There are FHA loans with less down required BUT in todays tight inventory the more down the better chance to complete a transaction.
0 votes Thank Flag Link Thu Dec 6, 2012
John is correct, there is no waiting period IF borrower had no late payments on any mortgage and consumer debts within the 12 month period preceding the short sale AND they are NOT taking advantage of declining market conditions.

Below is the link for FHA maximum limits for 90623 California.

Ron Jensrud
100% for Home Buyers - 100% of the Time!
0 votes Thank Flag Link Thu Dec 6, 2012
Bell & Hurd - FHA maximum loan limits in Lake County is $298,750 for a single family home. (Check the attached link for the county that you plan on buying in.)

At that price range you probably wouldn't be using a FHA loan, unless you put down $301,250. More than likely you'd be going conventional, however, to stay out of the Jumbo loans you would need to get the loan balance down to $417,000. I also think the minimum waiting period is going to be 3 years. You might be able to get it sooner using VA, if you have those benefits available.

Keeping the payments under $3000 are going to depend on how much the property taxes and home owners insurance are, as well as, the loan program. To get the BEST advice you should contact a Mortgage Lender and an Exclusive Buyers Agent in your location. If you need help locating either, contact me and I can put you in touch with them.

P.S. only put down enough to avoid mortgage insurance. Keep the remaining liquid in case of an emergency or other better interest yielding investments. Every $1000 you put down over that will only lower your payment by $5-$6. With interest rates as low as they are, you want as much as you can in the loan.

Ron Jensrud
100% for Home Buyers - 100% of the Time!
0 votes Thank Flag Link Wed Dec 5, 2012
I have talked with many lenders about this and typically find that a buyer needs at least 20% down payment to qualify for a mortgage if short sale was less than 3 years ago. As Sheryl said, FHA is still 3 years minimum to qualify.
0 votes Thank Flag Link Wed Dec 5, 2012
about $80,000 down, if you go fha, will keep you a few bucks under $3,000

0 votes Thank Flag Link Wed Dec 5, 2012
the larger the downpayment the better position you will be in to negotiate there are exceptions to this when regarding an individuals whole picture not just the mortgage. For instance borrowing money on a home is at record lows so keep in mind any credit cards or auto loans etc that you're paying a higher rate of interest. Also keep an emergency fund set aside in case of job change/ illness etc. So back to the mortgage you can pay as little down with some loans as 3.5% (fha) or 100%(usda* still have to pay for appraisal, earnest money and inspection fees) usda you don't have pmi (private mortgage insurance) so your dollar goes farther if you qualify. Remember you can always pay more than the minimum monthly payment on your home loan "principal only payment" which will knock the interest way down if done consistently over a period of time. I hope this helps you. Feel free to contact me directly with any questions at tn115@comcast.net
0 votes Thank Flag Link Wed Dec 5, 2012
That includes taxes and insurance
0 votes Thank Flag Link Wed Dec 5, 2012
According to my lender, about 30% down
0 votes Thank Flag Link Wed Dec 5, 2012
The person you should be asking is a local and trusted loan ofiicer who can look at your credit and financials to see what programs you quailfy for. They then can outline what you will need to put down in order to reach your goal.
0 votes Thank Flag Link Wed Dec 5, 2012
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