< Back to JVM's Blog

Rent Backs; Gift of Equity; Appraisal Seasoning; 3% Down vs FHA

rent backsHere are a few “Mortgage Minders.”

Rent Backs. Most lenders allow sellers to “rent back” the home they just sold for as long as 60 days. If the term exceeds 60 days, however, “owner occupancy” comes into question for the buyers.

Gift of Equity. Down payments can be a “gift of equity” alone (with no cash). This is a great tool when a family member sells a home to another family member with limited funds. Remember also that “family member” can be used pretty loosely (aunt, uncle, cousin, etc.)

Appraisal Seasoning. Buyers often come to us a few months after they buy a home to see if they can get a higher appraisal and refi into a better loan. Most lenders and appraisers, however, correlate to the purchase price no matter what for the first six months after a purchase. Some lenders have a twelve month seasoning policy.

3% Down vs. FHA. Buyers can put as little as 3% down (1/2% less than FHA) with conventional financing, but we often discourage it b/c the private mortgage insurance rates are too high. FHA, with 3.5% down, is often a better deal, with lower mortgage insurance and interest rates.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167