How Much Money Do I Need To Buy A Home

This is a question that I get all the time. From some one looking into loans for a home that maybe thinking about some real estate.

The idea of shopping for a house has given me a few questions. What is the sort of down payment for any first time home purchaser and for a person with a a bad credit score score???"

First I am going to start with the obvious on the down payment.Considering you could buy a place with your personal resources.Then clarify your doubts that are the cause for confusion.On just how much you would have to pay as down payment and closing charges.

Today, most of the loans are done by the Federal Housing Administration (FHA).FHA loans are loans from govt. sponsored loans and so that is the reason for them being so popular.Since they are the ones who are known to have enough money to lend.Since the other type of bank loans available in today's market are conventional, it may be too difficult to qualify for them and so we won't be dealing too much with them.So let the starting point be some First Time Home Buyer Information.

To do a FHA loan all you need CURRENTLY IS 3.5% in the form of down payment for a house. I want to make sure you caught that keyword which is CURRENTLY.The Congress is being pushed to increase the down payment on a house to 5%. Aside from increasing the down payment to 5% there is also the possibility that minimum fico scores may be increased and the PMI was just increased this year.The PMI stands for Principal Mortgage Insurance, is insurance in case the home owner is on default and does nothing for the home owner but is solely for the benefit of the bank. On FHA loans a portion of the PMI is financed up front in the closing costs.

These are a few things to keep in mind if you are thinking of buying a house now. Or waiting for home prices to get lower or that super duper deal.Increase in down payment, difficult qualifiations for loan approval and high closing costs come about when home prices get lower.When you do not qualify for a home any longer, how does the price of it 6 months or a year from now affect you.The point you need to consider is that if you wish to buy a home but you think they may get cheaper tomorrow, you might qualify for one today but you may not qualify tomorrow.

Not just first time home buyers but most seem to get the terms closing costs and down payment mixed up.Your down payment is an amount based on your purchase price that you need to bring into the game like $3,500 for a $100k home.00 which affects the purchase price.Closing costs is what you need to get the loan and sometimes it shocks several first time home buyers as you need more than just the down payment.

The amount it costs you to get the loan is termed as closing costs.As mentioned above, one factor in getting the loan is YOU pay for the PMI.Your impounds form part of your closing costs and they include your taxes and your insurance. Which is collected upfront and depending on the time of the year will dictate how much is collected up front due to your new property taxes. Let's just say $3,000.00.Loan costs are there regardless of paying a point or not.1% of the total loan amount is what they refer to as paying a point. So on a $100,000.00 loan whih is a cost to you of $1,000.00.You also need to consider the admin costs involved in getting the loan.Usually closing costs can be an additional 3% of the purchase price of the home.

So now returning to just $3,500.00 is pretty much a small number BUT do not get discouraged because in today's market you can get the seller who is the BANK in the case of a foreclosure.Based on your luck, the bank might pay for some of your closing costs.Here you need to make sure that your team understands you well.The real estate agent and the loan officer who help you negotiate on the contract and get the loan respectively should be part of your team.Who needs to know what you need to qualify for.

Depending on where you live, you have other loans available to you.While some areas even have 1% down payment, there are also areas where you can qualify for rural development loan with 0% down.Your luck would ride high if your selling bank decides to pay for your closing costs, because with 0% down, you can possibly by a home at NO COST.

Either way this is for the first time in U.S. History shows that rates and home prices usually fall together. Interest rates are all time low and once they go back up it may be a long time before we see these rates again. There are many deals out there in the real estate market today.Don't let this window of opportunity slip by.

The author focuses on writing topics that include real estate and mortgages and mostly focuses on theSanta Maria real estate market on santa maria homes .