Buying a House

So I was talking to my mom and asked her how much DH and I have to save for a house. She told me we need 20% for a downpayment besides all the other costs. Is that right? Do DH and I have to save $70,000 before we can afford to buy a house (if we're looking at a $350,000 house)? If that's the case, we're going to live in an apartment forever and that just made me REALLY upset! I"m about to cry right now. I know NOTHING about buying a house and I REALLY want to be looking by this time next year.

Re: Buying a House

You can also look into an FHA loan as an option. Those loans only require 3.5% down vs the standard 20%.

Re: Buying a House

Re: Buying a House

I'm in the same boat as you. I cannot imagine EVER having enough money for a house. But I feel like evenually things fall into place.

PS...there is nothing wrong with renting...sometimes it is a better option for people...even if they do have the money for a DP.

Re: Buying a House

You need at least 3.5% down for an FHA mortgage. Your best bet would be to talk to a mortgage person to go over payments and see what you could afford/qualify for

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Message edited 10/28/2010 1:21:54 PM.

Re: Buying a House

Thanks everyone! Gotta talk to DH and see if he wants to sit down with someone. We need to still save some money but I want to at least know where we are going and what it's all about before we think we have a long wait and we don't OR we are thinking we have the money and we don't.

Re: Buying a House

No one really puts down 20% unless they have a lot of money. You can put down as little as 3.5% if you do an FHA loan - for a conventional loan I think you need a minimum of 10% down...

We put 3.5% down on our house. It doesn't make your payments as high as you think...

Re: Buying a House

You definitely don't need 20% as a down payment. There are different types of mortgage products out there, so you should definitely talk to a mortgage banker about your particular situation and see what your options are.

The previous posters are correct that you only need 3.5% for an FHA loan. The downsides of going that route are that FHA loans require mortgage insurance, which is an extra expense, and that you can usually get a better interest rate with a conventional (i.e., Fannie Mae) loan. But on the conventional side, you will have to pay mortgage insurance if you don't have a certain level of down payment anyway.

There are several factors that go into whether you can qualify for a mortgage and how much you can qualify for, but the biggest ones are your credit score and your debt-to-income ratio. It is harder to qualify for a conventional mortgage -- you need better credit, etc. (FHA is more forgiving). Because the banks are so strict re: Fannie Mae loans since the mortgage crisis/bailout, many buyers (even those who have good income and good credit) are going the FHA route today.

But I would definitely recommend talking to a mortgage banker (or several - as it helps to "comparison shop") to see what you can get in your current situation. It is a great time to buy -- the interest rates are so low and there is a lot of really affordable homes on the market. Even if you can't buy today, a good mortgage professional can advise you about what you need to do to get in a position to buy (credit repair, savings, etc.). There is a lot of myths and misinformation out there -- even among real estate professionals -- about financing available to home purchasers (and it keeps changing all the time), so you definitely want to get all of the facts.

If you need some recommendations re: mortgage guys, feel free to fm me. I am an associate broker at Weichert in North Bellmore, and I have several loan officers I would recommend.

Hope this helps!
Christine

Re: Buying a House

we are doing an FHA loan. We have a FABULOUS mortgage broker. FM me if you want his name!