Tuesday, April 29, 2014

How Much Money Do You Need to Buy a House?

How much money do you need in the bank to buy a house?  

If you are buying a primary residence (a house you're going to live in) and you won't own more than that one house after closing, then all you need is enough to pay for the down payment and the closing costs.  

How much is the down payment for a primary residence?

For a conventional (non-government) loan, the usual down payment is 5% of the purchase price, although there are conventional loans that only require 3% down.

If you get an FHA loan, then all you need is 3.5% of the purchase price.

If you qualify for a CHFA (Colorado Housing and Finance Authority) loan, then all you need is $1,000.

If you qualify for a VA loan, you don't need any money down.

How much do you need for closing costs?

That depends on the property you buy, but remember that there are three ways to pay for the closing costs:
  • You can pay them yourself.
  • You can negotiate to have the seller pay them for you (subject to certain limits).
  • You can pay a higher interest rate and have the lender pay them for you.
And also remember, you can get a gift from a relative and use that money to pay for your down payment and closing costs.  ALL of the money for the down payment and the closing costs can come from a gift, for both conventional and government (FHA and VA) loans.

If you have any questions at all about how much you'll need to buy a house, just give us a call.

Does your lender sell directly to Fannie Mae like we do, or do they have additional underwriting guidelines that prevent loans from being approved? 

Have questions about anything related to a mortgage?  Give us a call and see why they call us The Mortgage Experts.  

Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!  Call us if you want to use the best lenders in Colorado!  

Make sure you check out our web site:

By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

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