Tips In Buying A House

Buying A House In 2016

2016 is now here and many people have set a New Year’s Resolution and Goal that 2016 will be the year that they will be buying a house. The American Dream Of Home Ownership can become a reality for every hard working American. Many people do not realize that they qualify for a home loan and think that they need tons of money for the down payment and great credit in buying a house. There are renters who are paying over $1,500 per month in rental payments. $1,500 per month in monthly housing payment is equivalent to a $300,000 mortgage loan ( principal and interest ).  Housing prices are going up every year throughout the nation where many homeowners can have their mortgage payments less than what they would be paying for rent. Home Buyers should realize that the days where you need 20% down payment have long disappeared. You can now purchase a home with as little as 3.5% down payment with a FHA Loan. Most folks do not understand that you can qualify for a FHA Loan with prior bankruptcy and foreclosure. There are many folks who have outstanding collection accounts and think that they will not qualify for a home loan without paying off the old collection accounts with outstanding balances on them. This is so not true. You do not have to pay off collection accounts and charge off accounts to qualify for a FHA Loan. FHA allows home buyers to qualify for FHA Loans with outstanding collection accounts and does not require that borrowers pay collection accounts and charge offs. Many people thinking of buying a house think just because their credit scores are low that they will not qualify for a home loan. Again, these folks are wrong. All you need to qualify for a 3.5% down payment FHA home purchase loan is a 580 FICO credit score.

First Time Home Buyer Concerns In Buying A Home

If you have a job or other forms of solid documented income, you can be a homeowner. You do not need a large down payment and perfect credit to become a homeowner. Two things that are required is the down payment on the home purchase and the closing costs on home purchase . FHA requires a minimum 3.5% down payment on a home purchase, however, the down payment can be 100% gifted funds by a family member and/or relative.  Most home buyers do not have to worry about closing costs because most or all of the closing costs can be covered through a sellers concession towards buyers closing costs . A sellers concession is when the home seller will give the home buyer a credit for the home buyer to cover all or most of their closing costs. Closing costs are all fees and costs that a home buyer will encounter when buying a home. Examples of closing costs are origination fees, credit reporting fees, title charges, appraisal fees, inspection fees, recording charges, title charges, homeowners insurance, escrows ( pre-paids ), attorneys fees, and other third party charges that a mortgage loan borrower can encounter. FHA allows up to a maximum of 6% of the home purchase price for a home seller to give a home buyer sellers concessions for the home buyer’s closing costs. Sellers concessions can only be used for closing costs and cannot be used for the down payment on the home purchase. Any overages of sellers concessions needs to go back to the home seller and cannot be given as a cash allowance to the home buyer. When cases of overages of seller concessions happens, most mortgage lenders will use it to buy points to buy down the mortgage interest rates of the mortgage loan or to pay the upfront FHA mortgage insurance premium.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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