Down payment got you down?
For many Americans, coming up with a down payment for their first home can be a major road block and quite often the reason for renting, rather than owning a home.
A down payment is the difference between the home's purchase price and its mortgage amount. This percentage of the sale price must be paid upfront and can vary by lender, location, and loan program. A higher down payment generally translates into lower loan interest rate requirements.
Typically, a down payment comes from personal cash savings, but it can also be a gift that is not to be repaid, or a borrowed amount secured by assets.While conventional loan down payments may be close to 20% of the sale price, government loans typically have lower down payment requirements. This allows potential homebuyers who normally cannot meet downpayment requirements an opportunity to qualify for a mortgage. Keep in mind that down payments that are less than 20% of the sale price typically require mortgage insurance payments.
10 things to know before buying a home
1.Before you start looking for a home, get prequalified for a loan. Banks, credit unions, and mortgage bankers make home loans; mortgage brokers process loans through a variety of lenders. The lenders will take an application, process the loan documents, and see the loan through to the funding stage.
2. If you have marginal or bad credit, consult your lender. You may be able to qualify for a loan depending on how long ago and what reason(s) caused the bad credit.
3.You will need a down payment. Down payment requirements vary depending on the type of loan. You may also qualify for federal or local down payment assistance. Consult your real estate agent.
4.You will need funds for closing costs. Closing costs are charges for services related to the closing of your real estate transaction. They include, but are not limited to: Escrow fees, title policy issuance fees, mortgage insurance fees, fire,flood, and homeowners insurance, county recorder fees, and loan origination fees. Consult your lender for an actual estimate of these costs.
5. Some loans have points and some do not. A point is a loan origination fee equivalent to 1% of the loan amount. Together with the interest rate they constitute a yield on the your loan for the lender.
6.Mortgage rates can be fixed or adjustable. Which one is right for you depends on whether mortgage rates are at a high or a low point when you purchase, and or how long you plan on living in the home.
7. There are two main types of loan categories. Conventional mortgage loans are available with fixed or adjustable interest rates. Government loans include FHA fixed and adjustable mortgage rates, and VA fixed rate mortgage loans.
8. If you are a low to moderate income home-buyer, there are special programs out there that are design to help you. These loans are available through private lenders, as well as state and local housing agencies.
9. You may have to pay mortgage insurance. Mortgage insurance protects the lender from potential loss just in case you default on your mortgage loan payment. Mortgage insurance is always required on FHA loans.
10. Many organizations offer home loan counseling to prospective buyers. They will cover home selection, REALTOR service,lenders, loan programs,home-ownership responsibilities, saving for down payment, and other important information.
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Looking for an agent who's an expert in this local area, I can HELP!!! I bring a wealth of knowledge and expertise about buying and selling real estate. Looking for someone who knows this area inside and out! Again, I can HELP! I can work with you to find the right home at the right price for you, including all the neighborhood amenities that matter - not to mention the essential criteria you have for your ideal home
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Get a positive, helpful partner for buying or selling a home:
- Trusted resource for answers about the process
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- Ability to target home searches
- Strong negotiation skills
- Support through the closing and beyond
COMMUNITY INFORMATION
Understand the difference between "listing prices" (what sellers are asking for) and "sold prices" (what buyers are willing to pay).
By comparing these price trends, you'll have a good idea of where the market is heading. The median listing and sold property prices are calculated based on the market activity each month.
Some sales are not immediately available from public records. As they become available, the data are updated.
THANK YOU FOR VISITING!!!
Information provided courtesy of Holli Washington-Keller Williams Realty
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