User Name Password
Register



Joe Engbrock

Phone
(830) 305-4866
Fax
(830) 632-3068
E-Mail Us
Keller Williams Heritage - Seguin
801 N. 123 Bypass
SEGUIN, TX 78155

Contact Info.
Joe Engbrock


Phone
(830) 305-4866
Fax
(830) 632-3068

E-Mail Me


Keller Williams Heritage - Seguin

801 N. 123 Bypass
SEGUIN, TX 78155

Articles & Links
Refinancing

Leveraging Your Money

Length of Your Mortgage

Saving for the Down Payment

Closing Costs

How Mortgage Loans Work

When To Pay Points

Adjustable-Rate Mortgages

How Much Can You Afford?

Getting Your Finances in Order

Your Credit History

Mortgage Glossary

Free CMA Request

Free Moving Quote



FIRST TIME HOME BUYERS SPECIALIST *Voted # 1 Real Estate Agent in Guadalupe County 2008 - Seguin Gazette Readers Poll*

Saving for the Down Payment

Saving funds for a down payment should be part of an overall program to get your finances in order prior to shopping for a home. This includes rounding up financial records, examining your spending habits, and setting a budget you can live with. Remember, too, that the down payment is not the only up-front expense. An allowance for closing costs should also be included in your savings budget.

How much is required?
The down payment is usually expressed as a percentage of the overall purchase price of the home, and varies depending on the lender, the type of financing and amount of money being lent. In the past, the typical down payment was 20%, but in recent years lenders have been willing to offer conventional financing with as little as 3% down. U.S. Government financing programs, such as those offered by the Dept. of Veterans Affairs (VA) or the Federal Housing Administration (FHA), also require minimal down payments.

Private mortgage insurance
Typically, if your down payment is less than 20% of the purchase price, lenders will require you to carry PMI, or private mortgage insurance. This insurance protects the lender in case of loan default, and usually involves an up-front payment at closing, as well as a monthly premium. However, once you have paid off 20% of the loan, you can request the policy be canceled. Some lenders cancel the premium automatically, while others require you to make a request in writing.

Gifts
If you are having trouble saving enough money, many lenders will allow you to use gift funds for the down payment--as well as for related closing costs. The gift may come from family, friends or other sources, but remember that lenders usually require a "gift letter" stating the gift doesn't have to be repaid. In addition, some lenders will also require you to pay at least a portion of the down payment with your own cash. Thus, if you plan to use gift money to purchase your house, ask your lender about their policies regarding gifts.

Earnest money
Buyers are usually required to deposit earnest money with the seller when they make an offer. If the offer is accepted, the earnest money is then credited towards the down payment. The amount varies widely depending on the seller and local custom, but be prepared from the outset to have funds earmarked for this purpose.

Don't forget closing costs
In addition to the down payment, you will also need to save for additional fees associated with the loan. Known as closing costs, these charges cover items such as title insurance, documentary stamps, loan origination fees, the survey, attorney's fees, etc. When you submit your loan application, lenders are required to supply you with a good faith estimate of your closing costs.

Some buyers are surprised by the amount of the closing costs, which can easily run into the thousands of dollars. Remember, though, that closing costs can be negotiated with the seller. For example, you may agree to pay the full asking price in exchange for the seller paying all the allowable closing costs.

 
Preferred Partners
Check out the best in local home-related services.
Automated E-mail Listings Service
Sign up to automatically receive new listings today!
Home Advice
Get the answers on home selling and buying.
Real Estate News
Find out what's happening in real estate.

Main PageSearch for HomesFirst Time Home Buyer SpecialsSearch Comal CountySearch Guadalupe CountySearch SeguinSearch McQueeneySearch New BraunfelsMortgage CenterPre-Qualify Now!School InformationFree ReportsFree Home ValuationContact Me
Joe Engbrock

Phone
(830) 305-4866
Fax
(830) 632-3068
Keller Williams Heritage - Seguin
801 N. 123 Bypass
SEGUIN, TX 78155




AgentAdvantage.comWebsite Design and hosting by AgentAdvantage, official agent and broker website provider of Homes.com
Copyright 2000-2014 Homes.com, Inc. All Rights Reserved. Privacy Policy. Full Terms and Conditions.

Equal Housing Opportunity

Member Login