Tag Archives: down payment
Can I still buy a home with as little as 3.5% down?

describe the imageBefore 2008 there were programs that allowed buyers to finance 100% of their purchase. On the surface those programs sounded pretty good, except they carried high rates, adjustable terms, and pre-payment penalties.  But wait, there are still programs where you can get almost 100%, say 96.5%, a program backed up HUD, called FHA loans.  
  
FHA loans have been helping people become homeowners since 1934. The Federal Housing Administration (FHA) – which is part of HUD – insures your purchase loan. 

Low down payments, 3.5%
Low closing costs, seller can give up to 6% concession. 
Easy credit qualifying
What does FHA have for you?

Buying your first home?

FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.

Want a fixer-upper?

FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Its called an FHA 203K loan.  Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs – all in one loan.

Financial help for seniors

FHA has a program commonly known as a home equity conversion mortgage, or reverse mortgage.  Are you 62 or older? Do you live in your home? Do you own it outright or have a low loan balance? If you can answer “yes” to all of these questions, then the FHA Reverse Mortgage might be right for you. It lets you convert a portion of your equity into cash.

Want to make your home more energy efficient?

You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.

How about manufactured housing and mobile homes?

Yes, FHA has financing for some mobile homes and factory-built housing. To qualify the home must be fee simple; in other words, the mobile home or factory built housing must be on land that the property is situated.  

Are you Ready to Purchase a Home? – How much can you afford?

describe the imageIf you rent the home you live in or thinking about upgrading to a larger home or moving to another area, then the right planning can help you to purchase a home.

To discover your homebuying potential,  you will want to calculate your:

  • Income
  • Savings
  • Monthly Expenses
  • Current Debt

These factors determine how much of a loan you can afford and how buying a home will affect your monthly budget, once you compute all your expenses.

What is your Income?First you need to determine all of your sources of income. You will need money for your down payment and for your closing costs.  The FHA, VA and other mortgage programs may require smaller down payments.  In some cases the closing costs may sometimes be rolled into the mortgage or you can get seller assistance.Here are a few questions to help you to estimate your financial position.•    What is your average monthly income?
•    Do you expect your income to remain level in the near future?
•    If not, do you expect it to increase or decrease?

 

Use the following income categories to estimate your monthly income:

Income Category

Monthly

Borrower’s Salary

$

Co-Borrower’s Salary

$

Taxable Interest

$

Investment Dividends

$

Other Income

$

How much will you need for your Down Payment?Do you have Savings, Investments, Stocks or other Liquid?Add up your savings. Any money saved can help you buy a home. Your savings can be used to pay the down payment and/or closing costs. You know your own saving habits, the more you save the better and the more you put down on your house, the lower will be your monthly payment.

•    What portion of your income are you saving now?
•    Can you afford to put more money into savings?

Use the following savings categories to estimate your monthly savings.

Savings Category

Monthly

Savings Account

$

Checking Account

$

Retirement Fund Contributions

$

Stocks, Mutual Fund Investments

$

Other Savings

$

              
          
Monthly Expenses – Do you know where your money is going?How much are you spending each month? You can expect your monthly expenses to go up when you buy a home. Will you have enough money to pay the mortgage, insurance and property tax in addition to your other expenses?

Use the worksheet below to calculate the money you currently spend each month.

 

Expense Category

Monthly (current)

Utilities

$

Car Expenses

$

Insurance

$

Medical Expenses

$

Clothing

$

Taxes

$

Entertainment/Purchases

$

Child Support

$

                        
How Much Debt do you Have?Review your current debt obligations.  We examine the ratio of your debt to your income when deciding how much money to lend you.  Consider how additional debt from house payments, added to your existing debt, will affect your lifestyle.

Debt Category

Monthly

Credit Card

$

Car Loans

$

School Loans

$

Alimony

$

Child Support

$

Other Personal Debt

$

Wow! There is a lot to consider when buying a home.  Rest assured, if you are on this page right now you are on the right path.  Please feel free to let us know if you have any questions.

Still have questions?   Just give us a call at (302) 266-9500 or simply click the button below to contact Sam.

 

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