You may understand that a down payment is typically required to purchase a home, but it is also important to set expectations for closing costs as well. Closing costs help pay to set up the loan, many of the costs are the same at most institutions, and these costs can be paid for in a few different ways. In a nutshell: It is part of your responsibility as a homebuyer to understand closing costs. Closing costs are what you pay to close on a home purchase, set up your mortgage, and fill your escrow account. You should expect closing costs to be between 2% and 3% of the purchase price. Sometimes a seller can contribute to cover part, or all of these costs, however even less known is that your lender can potentially give you credits towards closing costs for taking a higher interest rate. Definition The term closing costs can cover a few things, however my definition is: the total upfront costs of a home mortgage. Closing costs in this article are n...
These two loan options go head to head for the home buyers who typically have less than 10-20% for a down payment. Both options offer an affordable path to home ownership, and both exist because they fit different applicant criteria. This is a lot of information and can be overwhelming at first! When you’re ready, I can work through both with you and start a strategy for your personal situation and plans. The Basics: A low down payment minimum is required for each. Mortgage insurance is set up differently but it is required with both (if you’re putting less than 20% down). It is not required that you be a first-time home buyer for either. Each has a minimum credit score requirement which also depends on the lender you work with. Both programs require you to occupy the house you purchase using the loan. Key Differences: Mortgage Insurance: FHA is fixed at one rate, no matter what your credit score is, as long as you qualify. FHA mortgage ...
Whether you are a first time home buyer or have purchased many homes in your lifetime, the minimum qualifications that lending institutions require are the same. These are typical guidelines, however they may be flexible depending on the situation. Check with myself or your loan officer. All of these qualifications exist so the lender and the borrower can examine if the borrowers are in strong financial standpoint. The banks, government, city, and myself, don't want to put a home owner in a position where they struggle to pay the monthly mortgage payment and are left without money for everything else. Qualifications for buying a home Employment History : The first sign that somebody is ready for the responsibility of a mortgage payment is that they have stable work history for at least the past two years. For the duration of those two years, if you did happen to change jobs, the jobs should be in an alike industry. Note: If you have been going to school, and have just recentl...
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