My realtor says I must put show how much I will bring to the table as 3.5 % of the cost. Is this true. I say $0.00! Can't I Negotiate by

Asked by Dynav01, 20876 Fri Sep 10, 2010

concessions?

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21
Ania Miller, Agent, Millersville, MD
Fri Sep 10, 2010
Speak with your lender, and ask him the questions that need to be answered. Realtors sell homes, lenders know the loan process.
Ania
AniaMiller@kw.com
Web Reference:  http://www.aniamiller.com
1 vote
Thom Colby, Agent, Irvine, CA
Sat Dec 28, 2013
This question was asked more than 3 years ago !
0 votes
It is hard to add anything to the information that has already been provided.
Flag Sat Dec 28, 2013
Donna Kerr, Agent, Silver Spring, MD
Sat Dec 28, 2013
There are very few 0% down loan programs other than a Veteran's Affairs (VA) loan which would require you to be a Veteran. The lowest down payment loan is an FHA loan which does require you to bring at least 3.5% to the table. The closing costs could then be offset by a seller credit or concession.
0 votes
Your Solar R…, Agent, Silver Spring, MD
Fri Feb 22, 2013
USDA offers 100% programs with restrictions. FHA , you will need 3.5% down or more.
There are lenders that will offer 100%.
0 votes
Miekeba Jones, Agent, Silver Spring, MD
Sun Feb 10, 2013
Hi Dynav01, your Realtor may be referring to the 3.5% down payment. Consult your lender and ask for a good faith estimate to see what the lender estimates.
0 votes
Your Solar R…, Agent, Silver Spring, MD
Sun Feb 3, 2013
We are agents, its always negotiable. There are lender that offer 100% products, 0 down loans. In addition, the seller and the mortgage originator can help with closing cost. Some restrictions apply.
http://www.kensingtonareahomes.com
0 votes
Jessica Hood…, Agent, Gambrills, MD
Sun Feb 20, 2011
Hi Dyna,

I'm not sure I fully understand your question the way it is worded but if I'm reading correctly you may be confusing downpayment with closing costs. If you are getting an FHA loan your downpayment would be roughly 3.5% and you can't negotiate on that. Nor can the Seller pay it for you. Your closing costs which are in addition to the down payment are negotiable and the Seller is usually allowed to pay some or all of those. Best of luck to you.
0 votes
Akil Walker, Agent, Upper Marlboro, MD
Sun Feb 20, 2011
Dynav01,

Have you spoken to lender and have you been approved for a loan?

It appears with the 3.5% you have a FHA loan. I believe your realtor was telling you the 3.5 shows your commitment to purchasing a home. The days of buying a home with $0 are few and far in between with a few exceptions.

You can negotiate concessions but you will need some for escrow deposit and other items.

Best of luck
0 votes
Craig Fauver, Agent, McLean, VA
Sat Oct 30, 2010
As others have said, lenders are the experts on financing. You will need 3.5% down, ask your lender about local down-payment assistance programs (DPAP) or if you have a family member that could give you the money ask about using a gift w/ a gift letter. Honestly speaking though, if you do not have money in the bank it is most likely a bad idea purchase a home even if you can find a way unless all of the following are true:

A) You have a steady source of income.
B) Owning will be cheaper than renting.
C) You HAVE a fall back like a family member who can help you out if you get hit with an unexpected repair bill (or maybe you should just expect a repair bill because they will occur). This is a huge reason people fall behind. If you don't have money for a downpayment, how will you pay to fix the leaky roof or when the stove stops working?

Good Luck whatever you decide to do.

Craig Fauver
REALTOR in DC, MD, VA
0 votes
brent mendel…, Mortgage Broker Or Lender, Bethesda, MD
Mon Sep 13, 2010
Ania,

Loved the clear honest answer. Wish more realtors felt like you do. If I can ever be of service please let me know.
0 votes
Thom Colby, Agent, Irvine, CA
Sat Sep 11, 2010
Dyna,

Basic stuff - You cannot buy a property without REAL money of your own - period! The old days of no money down - no money in the bank and just signing like leasing an apartment are gone forever.

You have to show YOU have some money of your own.

Best of luck,

Thom Colby
Broker / Owner & Certified HAFA Specialist
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We NEVER DOUBLE-END Transactions in our Brokerage. There is NO benefit to the Seller or Buyer and only benefits the Agent. Also, NEVER use your RE Agent / Broker as your Lender or vice versa.
888-391-5245 Direct Cell
THOM@THOMCOLBY.COM
DRE# 01398570
0 votes
Ania Miller, Agent, Millersville, MD
Sat Sep 11, 2010
So here we go again Dynav01;
You should have already spoken with a lender, his job is to qualify you for a loan, and depending what kind of loan you are eligible for, that is when you find out what kind of money you need out of pocket.
Ania
AniaMiller@kw.com
http://www.aniamiller.com
0 votes
Sarah Toppins, Agent, Bethesda, MD
Fri Sep 10, 2010
When I read your question, I interpreted it as how much money do you need to write your earnest money deposit for. That varies by location. In this area, you can put down as little as $1000 in some areas, such as Prince Georges County, and in some price ranges. In other areas, such as Montgomery County, you'll need to put between three and five percent of the purchase price down. That money will be credited to your closing costs and down payment at settlement, and if you've paid more than you need, the settlement firm will rebate the difference back to you. If you're going after a low money down loan, you could probably put less down. If you're paying all cash, the seller would expect more. In a multiple offer situation, you'll need to put down more. Hope that helps.
0 votes
brent mendel…, Mortgage Broker Or Lender, Bethesda, MD
Fri Sep 10, 2010
Laura,

Basically correct but there are grants like FHLB and HOC that you can get most of the 3.5% downpayment based on a few conditions such as income. Great deals but not many loan officer have them to offer. You must be a bank not a broker for the most part. Even with those programs we offer you still need some of your own money in the deal though.
0 votes
Jessica Hood…, Agent, Gambrills, MD
Fri Sep 10, 2010
You can always negotiate concessions and closing costs on your home purchase. However, all programs but VA financing require a downpayment. It sounds like your Realtor is guiding you on what will be required of you to put down on an FHA loan. FHA no longer allows a homeowner to purchase with no downpayment. In part because of the high default rate. They offer low down payment loans.
0 votes
John Juarez, Agent, Fremont, CA
Fri Sep 10, 2010
Your question is a little confusing. In general, I agree with the comments that have been posted. If you are seeking an FHA loan you will have to show that you do have the down payment available in liquid form. That means in the bank or in some sort of liquid investment like a securities account. Perhaps a retirement account against which you will borrow? You will also need to show that you have the funds to pay for the closing costs. If you can get the seller to agree to pay for the closing cost, that is good. If you cannot negotiate agreement with the seller to pay for closing costs you need to have the cash available.

If on the other hand, you are trying to get the seller to pay the 3.5% down payment, that is not going to work.
0 votes
brent mendel…, Mortgage Broker Or Lender, Bethesda, MD
Fri Sep 10, 2010
Thanks for understanding Marge, it's tough to convey tone online and I really wasn't trying to be difficult you know? The answers are almost always well intentioned but sometimes cause confusion and heartburn for everyone involved. Hey I know the clients ask all the time, sometimes they ask me if they are paying a fair price for the home. I say how do I know that's why you hired the realtor you know. I try and stay out of all that because I just don't know the answers and even when I do know I still defer to the realtors because they are the experts on that type of question.
0 votes
Marge Bennett, Agent, Fort Myers, FL
Fri Sep 10, 2010
As a Realtor, I agree with Brent. Contact your lender. Underwriters are getting very picky as to where the money is coming from and proof.
0 votes
brent mendel…, Mortgage Broker Or Lender, Bethesda, MD
Fri Sep 10, 2010
You will need to show 3.5% as a down payment plus the closing costs. You can receive seller help for the closing costs if you can reach an agreement and there are gift funds and grant programs available to assist you with the 3.5% Matthew is right you must show and explain all funds to the UW. I wouldn't put a great deal of faith in what your realtor says but rather listen to the loan officer on this question. At least from how I understand it. Sorry to be bashing realtors I am not anti realtor but rather anti realtor fishing in my backyard if you know what I mean. Hope this helps.
0 votes
Jessica, , Virginia
Fri Sep 10, 2010
Your agent wants to get you preapproved. This means that a you have a letter from a lender (bank) stating that you qualify to receive a mortgage loan for X amount. This process includes them verifying if you have down payment funds.

The reason the real estate agent want this is so, if for some reason you do not qualify, you and the agent haven’t wasted time looking at homes.

This is a FREE and important first step when buying a home because it sets the price range in which to search for homes and catches any qualification issues early in the process.

Also in today’s market most sellers will not accept an offer on a house until you get pre approved. So unless you are paying cash for a house, at some point you will need to prove you have the funds.

You can learn more about the home buying process from my blog http://homebuyersblog.wordpress.com/
0 votes
Matthew T. S…, Agent, Perry Hall, MD
Fri Sep 10, 2010
If you are receiving an FHA loan you will need to provide evidence to the lender that you do have the minimum required 3.5% of the purchase price in order to close on your loan. If you cannot demonstrate this through your bank statements or through gift of funds from a family member the underwriters of your loan will red-flag your file.
Web Reference:  http://www.soldwithsmoot.com
0 votes
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