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It is important to identify your financial information before the process begins to determine exactly how much house you are qualified for and are comfortable to buy.

HOW MUCH DOWN PAYMENT

Down payments can range from zero down to 99%. There is no standard amount. It is based on your personal situation and requirements. Every individual is unique in their loan requirements. Your lender can advise you which program is best for you. Many first time homebuyers put 3% to 5% down. This will require the buyer to purchase private mortgage insurance (pmi). This of coarse adds to your closing costs and monthly payments. Buyers putting 20% or more down will not be required to purchase PMI.

WHAT WILL MY CLOSING COSTS BE?

These are expenses associated with the transfer of property ownership. As a rule of thumb, these costs can range from about 3-½ % to 8% of the cost of the home. They can include attorney fees, lender fees (points), and escrow fees, recording fees, title insurance. Other up front costs that you will want to earmark some of your funds for would be; Home Inspector to evaluate your home’s soundness, an optional expense, but one worth considering strongly. And you may want to make a few immediate repairs prior to moving day. Don’t hesitate to discuss these costs with me. The sooner you know what you will need, the sooner you will be able to determine an accurate down payment figure.

HOW HIGH SHOULD I ALLOW FOR A MONTHLY PAYMENT AMOUNT?

This answer will depend on how much you require for other living expenses. One thing you certainly do not want to do is make yourself “house poor” or “payment poor”, so that you can not afford the quality of life you envisioned in your new home. As a rule of thumb, your monthly house payment, including principal, interest, taxes and insurance (PITI), should not be more than one third of your gross income. Of course, you should adjust this figure for unusual or extraordinary monthly expenses, such as special schooling, unusual health care expenses, and so forth.

In order to get specific numbers to the closing costs and monthly payments outlined above, consult with your loan officer. If you have not chosen a Lender as of yet I would be happy to provide you with the names of lenders I use on a regular basis. They will customize a lending program that suits you best. At that time they can also pre-qualify or pre-approve you for a home loan.