How much ca$h does it take to buy a home?

    When  looking into buying property/home there are multiple loan options. One of the most important part of the home buying process is picking the loan program that fits your needs. Not all loan programs are the same. When looking at loan options there are a few key factors to take into consideration:

    1.) Loan Program – down payment requirement, or amount of money required to put down
    2.) Loan Term, or length of the loan.

    To get plugged in with a local lender to help determine which option fits you best, call us at 405-509-0541 or contact us.

    1.) Loan Program– There are multiple loan options to choose from, each loan option has a different requirement. We have broken them down for each loan program.

    a.) Conventional Loan – Minimum down payment is 5%, yet there is an option to put less down. When you put less than 20% down, there will be mortgage insurance that will have to be paid until your loan-to-value (value of your home vs loan amount) is at 78%. There are multiple ways a buyer can choose to pay the mortgage insurance. *Mortgage Insurance & how it works

    b.) FHA – Minimum  down payment is 3.5%. Mortgage insurance will be included in your monthly payment. *Mortgage Insurance & how it works 

    c.) VA – Minimum down payment is 0%. VA loans do have what is called a VA funding fee, this fee can be paid upfront or added onto the loan amount. The VA funding fee varies based on, type of military service, down payment, etc. **Funding Fee Table below Also, 

    d.) USDA (Rural Development Loan) – Minimum down payment is 0%. Both the property and the applicant have to qualify for this loan program. Property qualification is based on location and the applicant is qualified based on income. The income is qualification metrics are adjusted based on family size.  Click here to see HUD’s full requirements. *Mortgage Insurance & How it works

    e.) HUD 184 (Native American Loan Program) – Minimum down payment, 2.25%.  In order to qualify for a Native American Loan, the borrower has to be a registered Native American and a member of a tribe. Click here to see HUD’s full requirements.

     

    2.) Loan Term – The term of your loan is how long you have to repay the loan. The term will also have an affect on the interest rate. The longer the term the higher the rate, the shorter the term the lower the rate. Most commonly used terms are 30 yr & 15 yr mortgages. The term that you choose will affect how much your monthly payment will be each month. The shorter the term, the higher your monthly payment.

    To get plugged in with a local lender to help determine which option fits you best, call us at 405-509-0541 or contact us.

    *Mortgage Insurance & How it works*

    Here is a link to the Consumer Financial Protection Bureau, which explains Mortgage Insurance further.

     

    **VA Funding Fee Chart – Purchase Only**

    Purchase – Never Used
    Down Payment Active Duty/Retired Guard/Reserve
    $0 Down 2.15% 2.40%
    5-10% Down 1.50% 1.75%
    10% or More 1.25% 1.50%
    Purchase – Subsequent Use
    Down Payment Active Duty/Retired Guard/Reserve
    $0 Down 3.30% 3.30%
    5-10% Down 1.50% 1.75%
    10% or More 1.25% 1.50%

     

    Homestead & Co. is NOT a lending institution, all information provided is based on our basic understanding of loan programs. All information is subject to change based on loan guidelines. All loans subject to credit approval. Rates and fees subject to change. Links are provided to help our clients get the most up to date information provided by the government.   

    Trackback from your site.

    Leave a Reply

    About our blog

    Our agents write often to give you the latest insights on owning a home or property in the local area.