3 Thoughts on As a first time home buyer, how much money do I save?
  1. Reply
    loanmasterone
    December 18, 2012 at 12:54 pm

    The answer to your question would depend on the amount you would be approved for your house purchase. It would also depend on the type mortgage you would be approved for thus determining the amount you would need as a down payment and closing cost.

    Most conventional lenders require between 10% and 20% down payment. FHA lenders have a program for as little as 3.5% down.VA lenders require no down payment mortgage loans.

    There are many first time home buyer programs available to you through local city and county. You might check with these local municipalities to find out if you are qualified for their programs.

    In order to find out the type mortgages you would be qualified for perhaps you should check with a local mortgage banker/broker to see what programs are available.

    There are also mortgage calculators on the internet that are available for your use in determining the down payment and closing cost that might be incurred in your obtaining a mortgage loan.

    I hope this might be of some benefit to you, good luck.

    “FIGHT ON”

  2. Reply
    ibu guru
    December 18, 2012 at 1:19 pm

    FHA requires min down of 3.5%, however, those are NOT getting done! Lenders are very skittish over the dreadful market, price declines, etc, so unless you have 20% cash down, you are likely to have serious problems. Also, spare yourself PMI hassles and expense! So 20% down, plus closing costs, plus 3-6 months reserves (some lenders want 9-12 months reserves).

    Price: 2 to 2.5 times annual gross income. If you hit 3x gross income, even with 20% down, you could get yourself into financial hot water very quickly. These are times to be conservative!

    3 yrs track record on the job, min 700-720 credit score (760 for conventional).

  3. Reply
    Jim
    December 18, 2012 at 1:35 pm

    Wow, it continues to amaze me how many people choose to answer a question in this forum, while having no clue what they’re talking about.

    Conventional loan: 5% down
    FHA loan: 3.5% down
    USDA Rural Development loan: 0 down

    The down payment may be higher if you are purchasing a home in an area designated as a “declining market”. But you can ask your local lender if your area is considered that or not.

    Keep in mind that closing costs are on top of those minimum down payments that I mentioned above, however you could negotiate to have the seller pay that for you.

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