My daughter & son-in-law were told by mortgage broker they have to pay 20% on FHA loan. I know that 3% is the requirement. Why so much???

Asked by Prestigios Design, Houston, TX Mon Jul 11, 2011

They are able to pay $15,000 d/p. This sounds more than reasonable to me on a $140,000 finance.

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Mon Jul 11, 2011
Hi Prestigios,

The only time I have ever seen FHA require 20% down was on a "kiddie condo" (where the parent/s cosign on the loan) 4 plex purchase.

Is that the case here?

If so, you should consider looking at a Freddie Mac loan and compare them.
1 vote
Stephanie Ba…, Agent, Houston, TX
Mon Jul 11, 2011
If the credit score is below 580 then 10% is required. There are also pre-paids involved. However, it's difficult to correctly answer without specific details. Perhaps their agent could inquire for you
1 vote
, ,
Mon Jul 11, 2011
Could it be that they need to put down 20% to lower the loan amount enough to qualify with the debt ratios?

Who knows. Could be anything.... not enough info.

Tom Burris
Mortgage Banker
(214) 763-4629 cell/text/nights/weekends(Really!!)
Lending all across the entire Great State of Texas!!
0 votes
Bruce Lynn, Agent, Coppell, TX
Mon Jul 11, 2011
That's a question for their loan officer.
Sounds conventional to me.
Do they qualify for FHA?
0 votes
Don Groff, Agent, Austin, TX
Mon Jul 11, 2011
I would get a second opinion. Additional down payments is sometimes required depending on the borrowers credit or the type of property being purchased. Without that information it is hard to understand why the 20% down payment would be required.

Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o.512.669.5599 m.512.633.4157
0 votes
Scott Godzyk, Agent, Manchester, NH
Mon Jul 11, 2011
The key is their credit score and financials, they should go to another loan ofcier with a local and trusted mortgage broker and have them check/prequailify them again and get a 2nd opinion. I have heard of 10% down for fha but 20% down is usually conventuional and for those with poorer credit…

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0 votes
Leah Doxakis, , Pearland, TX
Mon Jul 11, 2011
Some times due to credit or debt to income issues FHA automated underwriting system will only approve with a larger down payement. Before I accepted this however I would get a second opinon, I work with a very goood loan officer named Chad Earnest with Core lending his number is 713-501-4869 he would be a great source for a second opinion. He can also give you some advise how to improve the credit so the larger down payment may not be necessary.

Leah Doxakis
0 votes
Maggie McFar…, Agent, Pearland, TX
Mon Jul 11, 2011
That does sound high and they can always check with a mortgage company. This would help them when comparing the cost and the interest rates. The buyer now has 3.5% down payment for FHA plus the closing cost and prepaids.
0 votes
James Ward, , Texas
Mon Jul 11, 2011
Actually - FHA downpayment requirement is 3.5%. The reason they were told that they would have to put 20% down is the unknown? Maybe the "Broker" that mentioned this does not do FHA? Could be a number of reasons. They would be best to seek the advise of a mortgage professional that is a HUD direct Lender (Mortgage Banking firm). Our office is in Houston and we can be reached at 713.528.0333. We direct underwrite and direct fund for FHA. Check out…
Hope this helps.
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