How Much Money Do I Need To Buy A Home?
Whether someone is buying their first home or their fifth home, one of the most frequently asked questions from home buyers relates to money.
It normally sounds something like, “How much money do I need to buy a home?”
There truly is not a concrete answer to this question because there are many factors that contribute to each buyer’s own individual situation.
There are so many options when it comes to financing that each home buyers situation needs to be evaluated individually.Verify your new rate (May 23rd, 2019)
Do You Want To Make A Small Downpayment?
If you’re looking to buy a home with little- to no- money down, there are quite a few programs available.
The most popular program for buyers who are looking to spend little to no money on their home is a Federal Housing Administration home loan, which is also known as an FHA mortgage.
An FHA mortgage only requires a buyer to come up with a small 3.5% down payment.
FHA mortgages also allow a buyer to receive up to 6% of a home’s sale price in the form of a sellers concession.
If you’re looking to buy a home with the goal of “low monthly payments”, a conventional mortgage product may be your best option.
Conventional loans traditionally require a larger down payment for the best, lowest rates; but, there are conventional loan programs that allow just 3 percent down.
One advantage to using a conventional loan as compared to an FHA loan for your low-downpayment option is that the accompanying mortgage insurance of a conventional loan can eventually go away. By contrast, with a 30-year FHA loan, mortgage insurance is required for the loan’s entire life.
Eliminating mortgage insurance can reduce a buyer’s monthly payment significantly.Verify your new rate (May 23rd, 2019)
Are You Eligible For A Housing Grant?
If you happen to be a first-time home buyer, there may be programs and grants available for you from your state or local government.
Many states offer first-time home buyer programs and grants which provide you with money to use toward the closing costs of a home.
Some of these programs will require you to take home buying education courses, and may also be limited to buyers of certain income — but not always.
When you discuss your financing options with a lender, therefore, don’t forget to ask for which first time home buyer incentives, programs, or grants that you may qualify.
It’s important to also understand that the down payment is not the only cost associated with buying a home.
Other common costs and fees associated with buying a home include the bank appraisal fee, inspection costs, mortgage underwriting fees, processing fees, and bank attorney fees.
These common costs and fees vary from lender to lender, so it’s a good idea to discuss your financing options with multiple banks so that you can compare the costs and fees.
What Are Today’s Mortgage Rates?
There is no concrete answer to how much it costs to purchase a home. Since there are so many mortgage products available, it truly depends on your individual situation.
The cost to buy a home may vary from zero dollars to tens of thousands of dollars, depending on how you structure your “deal”. Be sure to ask a lender.
Also, take a look at today’s real mortgage rates now. Your social security number is not required to get started, and all quotes come with instant access to your live credit scores.Verify your new rate (May 23rd, 2019)