Home Buying 101: Financing Your Purchase
Figure out your needs
Monthly cost of owning a home
Ideal Neighborhood
The FHA Mortgage
The Conventional Mortgage
The Adjustable Rate Mortgage
Department Of Veterans Affairs Mortgage
Pre-Qualified vs Pre-Approval
Phase 2: Looking
Looking at homes
Types of homes
Single Family Homes
Town homes
Condominium
Twin Homes
Multi-Family Homes
Types of sellers
Traditional
Short Sale
Foreclosed
Researching A Home’s Public Information
Phase 3: Buying
Making an offer that counts
The Purchase Agreement
Buyer Letter to Seller
Inspections: Why get one?
Radon Testing
Sewer Line Scope Inspection
Fireplace Chimney Inspection
Mechanicals
Phase 4: Closing
Closing Costs Explained
Title Work
Appraisals
Underwriting
Utility Bills
Preparing for the Closing
The Closing
Mortgage Types
There are many types of mortgages available to suit many types of different financial situations. But there are just a few that are used commonly: the conventional mortgage, the FHA mortgage, and the DVA mortgage. Each has its pros and cons.
The FHA Mortgage
The Conventional Mortgage
The Adjustable Rate Mortgage
The Department Of Veterans Affairs Mortgage
Down Payment
How much should you put down? That really depends on how much you can afford. Putting more down means that the monthly payment will be lower. The most common down payment range I see on a regular basis is between 3% down and 20% down, with more coming in between 3% and 10%.
Another consideration is that if you put down 20%, the mortgage company won’t have a Private Mortgage Insurance requirement. This can save a bunch of money on a month-to-month basis. An alternative is once you reach 20% equity in your home, you can usually request the mortgage company to remove the PMI requirement.
Closing Costs
Here’s a word about closing costs. Each mortgage has some sort of closing costs associated with getting the mortgage. These closing costs usually run about 3% of the loan.
In today’s market, it is very common for a buyer to ask a seller to pay the buyer’s closing costs. It is usually not an issue for the seller as their bottom line is not affected by paying buyer’s closing costs. The only drawback is that the house needs to appraise at the higher value (sale price plus closing costs), but even that is almost never an issue either.