Bank refuse fixed rate mortgage due to low reserve funds?
A family member be turned down for a mortgage due to low reserve funds. They make plenty of money, credit ratings were fine, and they have the 20 percent down payment. However were told they needed more surrounded by their reserve funds in order to carry a fixed mortgage or they had to pay 25 percent down? Since when is this required? I enjoy never heard of this.
Answers:
I never hear of this either.. Reserve funds for the bank itself or for the association (town home, condo, neighborhood)?
bank have a reserve for themselves to protect against default loans.. I'm not sure what you show. However, they are changing tons of loan requirements.. so it could be entirely new policy.
You know 25% is not really that unusual as a down transmittal.
All loans require reserve funds. I can't believe people are posting on here, that enjoy had mortgages, that have never hear of this.
It is STANDARD banking practice.
Usually 2 to 6 months, minimum. It doesn't have to be currency, it can be 401K or other investments...only proof of assets is needed.
My advice? Try another guard...they can put less down and have more reserve funds. Source(s): former mortgage underwriter.
TSK, TSK TSK.... You are being lead astray by a lousy RE Team!! Depending on the state you live contained by, unless you're in a very expensive city, you should know how to buy a house w/only 3.5% dn pmt!! About the reserves, if memory serves, I believe are minimal: something like 6mos of property taxes and hazard insurance at most!!
I'm STILL a big believer surrounded by using leverage to purchase your first property. The difference in monthly payment between the smaller vs. larger dn pmt is minimal! After making your 3.5% dn pmt, keep hold of the balance of your cash within the bank for emergencies, NOT furniture, NOT vacation but legitimate emergencies!
You wanna be a legitimate smart 1st Time home buyer?? Use the FHA loan to buy 2 units. You will have someone, a tenant, helping you recompense for your retirement planning. Sure I know you want your privacy and all that but what the hell? If your slummin' on this board instead of talking to a CPA or Financial Planner its cuz you should be taking this direction!
It will become a part time job, but you will be supplementing your retirement income within 15-20yrs from now! After a few years you can borrow money from the equity your tenants build up for you and you can by the "White Picket" barricade home you "deserve"!! Source(s): Long Time in biz!
Are they buying a primary residence or an investment property?
If it's a primary they can get around this by puting less money down.
Let me know if you own more questions. Source(s): I'm a mortgage banker/broker licensed in adjectives 50 states.
Man, I have have a LOT of mortgages over the years and I have never ran into this! Usually I fragment up my reserve funds and call it "down payment". I thought most people did it that process.
Your friend has a lousy loan officer.
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Answers:
I never hear of this either.. Reserve funds for the bank itself or for the association (town home, condo, neighborhood)?
bank have a reserve for themselves to protect against default loans.. I'm not sure what you show. However, they are changing tons of loan requirements.. so it could be entirely new policy.
You know 25% is not really that unusual as a down transmittal.
All loans require reserve funds. I can't believe people are posting on here, that enjoy had mortgages, that have never hear of this.
It is STANDARD banking practice.
Usually 2 to 6 months, minimum. It doesn't have to be currency, it can be 401K or other investments...only proof of assets is needed.
My advice? Try another guard...they can put less down and have more reserve funds. Source(s): former mortgage underwriter.
TSK, TSK TSK.... You are being lead astray by a lousy RE Team!! Depending on the state you live contained by, unless you're in a very expensive city, you should know how to buy a house w/only 3.5% dn pmt!! About the reserves, if memory serves, I believe are minimal: something like 6mos of property taxes and hazard insurance at most!!
I'm STILL a big believer surrounded by using leverage to purchase your first property. The difference in monthly payment between the smaller vs. larger dn pmt is minimal! After making your 3.5% dn pmt, keep hold of the balance of your cash within the bank for emergencies, NOT furniture, NOT vacation but legitimate emergencies!
You wanna be a legitimate smart 1st Time home buyer?? Use the FHA loan to buy 2 units. You will have someone, a tenant, helping you recompense for your retirement planning. Sure I know you want your privacy and all that but what the hell? If your slummin' on this board instead of talking to a CPA or Financial Planner its cuz you should be taking this direction!
It will become a part time job, but you will be supplementing your retirement income within 15-20yrs from now! After a few years you can borrow money from the equity your tenants build up for you and you can by the "White Picket" barricade home you "deserve"!! Source(s): Long Time in biz!
Are they buying a primary residence or an investment property?
If it's a primary they can get around this by puting less money down.
Let me know if you own more questions. Source(s): I'm a mortgage banker/broker licensed in adjectives 50 states.
Man, I have have a LOT of mortgages over the years and I have never ran into this! Usually I fragment up my reserve funds and call it "down payment". I thought most people did it that process.
Your friend has a lousy loan officer.
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