Real Estate/Mortgage question

[Jeannie]

If you're approved for a mortgage with a 15% downpayment, then realize you can actually put down 20%, does the whole mortgage process have to start all over again?

 

[Ms.Minnie]

Assuming you are doing a conventional mortgage the answer would be no, you just need to have the loan amount changed. You also may want to see if you can get a better interest rate due to higher down payment.

 

[princesscinderella]

It might just be easier to close at the original 15% and if there’s no prepayment penalty just do a principal only payment of the extra 5% once the loan closes. Some banks are slow in processing loans that changing the terms can cause delays.

 

[bdcp]

At 20%, you don't need mortgage insurance. At 15% (conventional loan) you will. Best answer is to ask the mortgage broker/agent.

 

[AvidDisReader]

It might just be easier to close at the original 15% and if there’s no prepayment penalty just do a principal only payment of the extra 5% once the loan closes. Some banks are slow in processing loans that changing the terms can cause delays.

It might just be easier to close at the original 15% and if there’s no prepayment penalty just do a principal only payment of the extra 5% once the loan closes. Some banks are slow in processing loans that changing the terms can cause delays.

No, do NOT do this. There is MI involved that would not get cancled, plus as mentioned above, the interest rate is lower on an 80% ltv than on an 85% ltv.

 

[elgerber]

If you're approved for a mortgage with a 15% downpayment, then realize you can actually put down 20%, does the whole mortgage process have to start all over again?

No you don't. It's just a simple lowering of the loan amount, people change loan amounts all the time.

It might just be easier to close at the original 15% and if there’s no prepayment penalty just do a principal only payment of the extra 5% once the loan closes. Some banks are slow in processing loans that changing the terms can cause delays.

No, you would not want to do this, as you would be paying monthly mortgage insurance that you don't need.

 

[china mom]

I agree with the above posters. Always put down 20% if you can to avoid paying Mortgage Insurance. Once you have your loan closed with the 15/85, it will be difficult to get the mortgage insurance removed, even if you pay down the extra 5% to make it 20/80.

 

[_19disnA]

If you are talking about a mortgage 'pre-approval' that realtors want you to have so you don't waste everyone's time trying to buy a home where you wouldn't be qualified, shouldn't be an issue. When you actually go to get the loan on the specific house you will be buying is the time to provide the actual figures.

 

[CaptainAmerica]

You didn't ask, but if the reason you're able to put more down is that you just got some extra money from a source you weren't expecting (gift, inheritance, sale of stock, etc.) be prepared to document the hell out of where the money came from.

 

[Cannot_Wait_4Disney]

If you're approved for a mortgage with a 15% downpayment, then realize you can actually put down 20%, does the whole mortgage process have to start all over again?

If you are already conventional, and I would assume you're already on a conventional at 15% down. You're approved for the higher amount, you'll be approved for the lower amount. BTW at 20% down you don't have to pay any PMI. If this extra money is coming from a gift or an inheritance or the like, they'll probably want it documented that it is in fact such, rather than an under the table loan.

If you are moving from an FHA over to a conventional in order not to pay mortgage insurance, you will have to be approved again, and it would behove you to do so if you qualify. But that's it. You don't have to go through the entire process again. They already have your verified information. We in fact converted from FHA to conventional in order to put 20% down and get out of mortgage insurance. Piece of cake. 3 days after signing up to do so, we were approved.

It might just be easier to close at the original 15% and if there’s no prepayment penalty just do a principal only payment of the extra 5% once the loan closes. Some banks are slow in processing loans that changing the terms can cause delays.

In this case, no. At 20% you avoid PMI on a conventional loan. And there would be more red tape getting PMI removed after paying that extra principal than there would be going 20% down on the front end.

 

[Jeannie]

Thanks for all the replies. It isn't for me, but a close family member. They had a closing date for this week, but last week they realized that they would be able to up the down payment to 20%. The extra cash was due to getting more at closing from the house they sold than they were expecting. The lenders knew they had a closing date for this week and also knew there was a 'time is of the essence' clause. They didn't say anything last week when my family member told them about a bigger down payment. Late yesterday they were told that they won't be able to close until July 9. Meanwhile, furniture has been in storage since they moved out of the original house, and movers were set up for this week. UGH!