NWR - House Hunting Newbie

emarston1

FI and I are starting to save for a house and the idea of saving that much money for a downpayment is starting to overwhelm me.

Anyone know the standard percentage that you need for a down payment?  5? 10? even more?  I am completely lost when it comes to this stuff, so thanks for any help you are able to provide!!

JulesMarie25

My FI and I just closed on our house yesterday afternoon! House searching is a fun process, but is definately a rollar coaster ride!

You generally will need at least 3-3.5% to put down if you are getting an FHA loan. Most first time home buyers right now are going with an FHA loan versus a conventional loan. With a conventional, I was told you had to have more along the lines of 20% to put down. We did FHA.

Where are you planning on looking at? I have a great realator and a extremely awesome mortgage broker if you are interested. They had so much paitence and understood all of my millions of questions during the process.

*LBR*

I agree with the PP, usually with an FHA you need 3-3.5%. Most others are 20% depending on your loan. If you plan on looking in a more rural area, there is a loan called a USDA loan and with that one, you can put zero down. I think it's the only loan anymore that is zero down.

House hunting is tond of fun, but also very stressful. We closed on our first house last spring. It was a short sale, so a very LONG process!

Good luck!

boogerbearoriginal

Like other posters said, if you don't have less than 20% then you'll probably have to get a FHA loan. Keep in mind if you put less than 20% down you will have to pay mortgage insurance which will add to your monthly cost. Also, in addition to the down payment, you'll need money for closing costs as well.

I suggest you go to your/FI's bank and talk with a mortgage loan officer to get some initial questions asked. He/She should walk you through the process and what they will look for when you are ready to apply.

mordacious

We went with an FHA loan with 3.5% down but like other said we pay mortgage insurance (PMI) until we pay off 20% of the loan value. We pay $50 a month for PMI. We also had to pay a year of home owners insurance up front (around $630). I'm not sure if that's standard practice but something to think about. They sprung that upon us and we weren't exactly prepared for it.

Julz629

I would get in contact with your bank to figure out what you can afford before you start looking.  Most realtors won't work with you until you've done this, anyway.  I used to work for Rock Financial (now Quicken) and I would stay away from them -- you'll have better luck, and service, from a bank or credit union.

emarston1

Thanks for all the help ladies!  We won't start looking for probably another year but I was freaking out thinking we needed to save like $30,000 before we can buy a house.  Good to know that we won't need that much.