Good Morning!
I’ve written about this before, but it’s important, so I wanted to touch on it again.
Before you go house hunting make sure you have enough money available to get your loan approved and your house closed.
…I know it sounds simple, but many people don’t realize the number of funds they will need to get into 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.
…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 prepaid 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 a sales price.
Be prepared for these additional costs. However, there are a couple of ways to help you lower the closing costs and prepaid expenses.
That’s it for today!
Have a good day today! …and thanks for reading.
Brett