Why does a seller care about how much you put down

 

 Why does a seller care about how much you put down

A buyer asked me why does a seller care about how much you put down.  He was doing a FHA mortgage and putting down 3.5%, and we lost the home because the other person was putting down 20%.  The reason why sellers chose a buyer that puts more down is really two fold.  Number one  FHA mortgages are for people that might have credit issues or have limited amount of money.  Because a buyer is doing a FHA mortgage a seller can assume the buyer may have past credit or money issues that may side rail the mortgage.

A person that is doing a conventional mortgage and putting 20% down usually have better credit scores and show that they have the ability to save.  They may or may not have more assets in a 401K or other savings than a FHA buyer.  But as a seller you may go with somebody with 20% because of their ability to save shows the bank that they are more qualified than a FHA buyer.  If the bank thinks that way you as a seller should too.  That is why sellers care about how much you put down.  A 20% down buyer’s mortgage should close easier than a FHA buyer.

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Michigan trivia and interesting Michigan facts series part 1

Happy New Year to all!

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