Good Morning!
One big issue I see consistently is that people are unprepared for the amount of funds they will need when they buy a house.
Here is a simple breakdown of your out of the out of pocket costs you could expect from the loan program.
1) VA: 100% loan. No down payment.
2) USDA: 100% loan. No down payment
3) FHA: Minimum 3.5% down payment.
4) Conventional: 5% minimum down payment, or 3% down for first time home buyers.
…but you can expect more out of pocket than just the down payment. There are two other costs you can expect to pay when you purchase a home…
1) One is prepaids. This is prepaid interest, taxes, and insurance. Typically your prepaids will run 1% to 2.5% of a sales price.
2) Then there are your closing costs… Typically closing costs (from all entities – title, appraisal, mortgage, survey, etc.) will add another 1.5% to 3% to your number to bring to closing.
Be prepared for these additional costs.
That’s it for today!
Have a good day today! …and thanks for reading.
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