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Frequently ASKED QUESTIONS
What Other Fees Are There, Besides The Downpayment?
Answer: Mainly loan origination and closing costs.
The downpayment is usually the largest cost associated with buying a house. Lending fees are the second-largest cost to homebuyers. Most lenders will charge between 2% to 4% of the loan amount for loan origination fees, depending on the loan type. Conventional loans usually have lower loan origination fees, but require more money down. Your loan officer will be able to help you determine how much you can expect to pay towards loan origination and closing costs.
How Much Money Do I Need For A Downpayment?
Answer: It depends on your loan type. Usually 3% to 5% down.
The most common answer is 3% to 5% of the purchase price. FHA loans just dropped their requirement from 3.5% to 3.0%. There are also some conventional loans that only require 3% down. Veterans are usually eligible for a VA loan, which requires no money down. Properties in rural areas are usually eligible for a USDA loan, which also requires no money down.
What Kind Of Credit Score Do I Need To Buy A Home?
Answer: Usually 620+
A 620 credit score, or better, is recommended. As you are probably aware, a higher credit score offers better lending terms. This is an ever-changing topic, however, as loan requirements are constantly changing. There are some lenders that will approve buyers with a 580 score, sometimes even lower. Your loan officer will be the best source to give you a current answer to today’s lending requirements.
Where Do I Start to Buy a Home?
Answer: The Mortgage Pre-Approval.
Unless you are paying cash for a house, you will need to get a mortgage. In order to know how much home you can afford, you will need to get pre-approved for a loan. This is the first step is that I can give you recommendations on lenders in your niche area if you do not have a preferred lender.