February 9th, 2015
- We are receiving a gift for our down payment. It will be in excess of 20% of the purchase price. Someone told us part of that money has to be our own funds. Is this true? If the down payment is in excess of 20% of the purchase price, then no, you do not have a funds contribution requirement. At that level of down payment, gifts are allowed without borrower contribution.
- What is the conventional lending difference in waiting period between foreclosure vs. pre-foreclosure (short sale)? When can I buy again? I prefer a plain ole' vanilla 30-year fixed. With a foreclosure, the waiting period is seven years, three years with extenuating circumstances. With a pre-foreclosure or short sale, the waiting period is four years, 2 years with extenuating circumstances. Extenuating circumstances include but are not limited to death or severe illness of a major wage earner or loss of employment due to lay-off or corporate cuts of a major wage earner. While very sad, divorce is never considered an extenuating circumstance.
- We are buying a home before our existing house sells. We keep hearing we need reserves. How much do we need? If your equity position in your current primary residence is 30% or more, you will need 2 months reserves for the new home and 2 months reserves for your existing home. If the equity is less than 30%, you will need 6 months reserves for your new home and 6 months reserves for your existing home.
Please feel free to contact me with any questions you might have. I look forward to working with you and your clients. Please remember, I am licensed in Virginia, North Carolina and Florida.
Jennifer Keenan, Sr Mortgage Consultant, NMLS# 101837
Tidewater Home Funding, 757-272-4199