Sources of down payments

Sources of down payments - Some people use their 401K money for a down payment. Normally, when someone takes money out of their 401K, the government imposes a 10% penalty for early withdrawal.

However, when its used by a first-time homebuyer as a down payment, the government does not penalize the borrower for this transaction. This is one of the exceptions.

Another option for a down payment is to get a Gift from a relative. The relative must be in your immediate family. Often when all or part of your down payment is in the form of a gift the lender will have some additional requirements. The lender will ask for a gift letter, which states the relationship of the person giving you the gift and it states that it is not a loan. The lender may also "source" the funds, meaning they ask for documentation to show where the money is coming from. They may also "season" the funds, meaning they would need documentation of how long the funds have been available.

There are also many private and government down payment assistance programs available to help buyers. These are usually in the form of a grant and do not need to be paid back.

Most homes are bought with 0% down, so you would only need money for closing costs. These loans can be a single loan for 100% of the purchase price or 2 loans, one for 80% and the other for 20% of the purchase price.

Some people use the proceeds from the sale of a previous home to fund their down payment for a new home. If you have recently sold your home and deposited the proceeds into a checking or savings account, your new lender will probably want to verify the source of those funds. A common way to prove the source of the funds is by providing your mortgage broker with the HUD1 settlement statement you were provided with at the closing of the sale of your last home.

Mortgage lates - Mortgage lates is a term sometimes used by loan officers. It is used to describe how many times a borrower has been late on their mortgage. For example, 3x30 means the borrower has been 30 days late 3 times.

Some lenders will allow you a "rolling late". Here is an example of how this works:

Suppose your late in January, then Feburary, and then March. The lender says that since they are all back to back to back its considered a "rolling late". This means that even though you were late 3 times the lender only counts it as 1. You cannot have more then a string of 6 lates in row. So 7 30 day lates in a row would count as 2.

Mortgage lates are late payments that are at least 30 days late. However, your mortgage company will probably charge a late fee if you are more than a certain number of days late, usually 10 or 15 days.

Mortgage lates are one of the most important factors a lender will look at when deciding on whether or not to approve a new loan. Often someone with no mortgage lates and a lower FICO credit score can get a better interest rate than someone who has a higher score but does have mortgage lates on their credit history. For this reason always try to pay your mortgage before any other bills - it will put you in a much better position when you need to refinance or purchase a new home.

My Mortgage Company Just Sold My Mortgage - If you have received a letter stating that your mortgage has been sold or transferred, you may feel some anxiety. Dont worry, this is a very normal occurence and you havent done anything wrong.

Most mortgage lenders sell their mortgages to other, larger lenders or institutional lenders. They sell their mortgages for a liitle more than they loaned out and use the proceeds to cover expenses and fund more mortgages.