Have you ever wondered what you really need to have for a down payment on a home? Here is some information from our friend Chad Talpas with New Life Mortgage.
Buying a home does not need to be complicated. Many people think for a simple home purchase, they need 20% to put down on their house. They also think they need perfect credit. The truth is, there are lots of options that can seem confusing, but if you talk to a mortgage professional, the process is pretty easy.
Here are some basics to keep in mind. If your credit score is over 600, options such as FHA are available that can help get you in a home. In most of these cases, you will need 3.5% of your purchase price to buy the home. You can get a gift from a relative to help with the 3.5%.
If your credit is over 640, there are many different types of ‘conventional loans’ that you may qualify for. You can actually qualify for a mortgage with as little as 5% down in this credit tier. Although in this credit tier, FHA may still be the best mortgage option and that would keep the 3.5% down payment option available.
When your credit score is over 700, there are many mortgage options available to you. There are options with as little as 1% down and some options that could result in losing monthly mortgage insurance with just 1% down.
The point is, in many cases, just 1% to 3.5% down could get you in a home that is cheaper than paying rent. Don’t be afraid to seek out a mortgage professional and have a conversation. Today, there are lots of options available and no matter if it’s buying your first home, buying a bigger home or purchasing your dream home, you might be surprised with what you can afford. Ask a professional, develop a plan and get yourself in a new home!
For more information, contact anyone from the We Sell Indy Team or New Life Mortgage.