How Much Will My Down Payment Be?

A down payment is the money you pay up front toward the house you're buying. The more cash you pay as a down payment, the less you will borrow and the less you pay each month on your mortgage. Typical conventional loans require from 5 to 20 percent of the purchase price as a down payment. Conventional lenders are sometimes willing to accept a lower down payment if private mortgage insurance (PMI) is secured to protect the lender in case of default in repayment of the loan.

            If you qualify for a Veterans Administration (VA) or Federal Housing Administration (FHA) loan, you will benefit from very attractive down payments that can range between zero and 5 percent.

Closing Costs

Closing costs include expenses such as the loan origination fee, loan discount points, advance payment of interest, credit report fee, appraisal fee, title search and title insurance fees, document preparation fees, and recording and transfer fees. If you plan to assume an existing mortgage, there may be an "assumption" fee. Because closing costs vary considerably from one lender to the next, it is wise to shop around for the best available loan. Your REALTORÒ can help you contact several lenders, if you desire.

  Understanding The Mortgage Loan

"Qualifying" for a mortgage loan is the first step in the loan approval process. Qualifying means learning just how much money you may finance in order to purchase your new home.

Real estate loans are generally available from 15 to 30 year periods. They fall into two basis categories: (1) Loans that have fixed interest rates and payments: and (2) loans with interest rates and payments that vary over the life of the loan. The interest rate, the principal amount of the mortgage, and the length of the loan will determine the amount of your monthly payments.

Professional Assistance

The preceding information will help you start your search for a new home. Perhaps the most efficient method of shopping for a home is to consult a real estate professional.

A real estate agent can provide a broad range of services to help you find the right home in the shortest period of time. Professional real estate services include:

1. Helping you pre-qualify for a loan so that you'll know what price range you can afford;
2. Presenting you with detailed information about each community such as prices and characteristics of homes in the area, the location of schools and shopping, property tax rates, availability of other services, etc.;
3. Showing you homes that meet your specific requirements without wasting your time seeing properties that would not suit your needs (your real estate professional can generate a complete list of homes from the Multiple Listing Service that specifically fit your wish list and your personal financial status:)
4. Presenting your offer to the seller as a third party who is positioned to negotiate on your behalf as a buyer representative until agreement is reached;
5. Consulting with you about mortgage loan availability, real estate attorneys, escrow services, home and termite inspections, utility costs, etc.

CENTURY 21Ò Real Estate Professionals

The CENTURY 21 system is the world's largest, most recognized and most successful real estate sales organization with more than 6000 offices throughout the United Kingdom, Mexico France, Japan, Australia, New Zealand, Papua New Guinea, Hong Kong, and Puerto Rico, Belgium, a sub-franchisor in the Benelux nations, and still growing.

What does this mean to you as a homebuyer? Each CENTURY 21 office is independently owned and operated, and is staffed by local sales professionals who are trained to assist you with the details of your home purchase. When you work with a CENTURY 21 real estate professional, you receive the utmost in service, quality and professionalism.

Ask your CENTURY 21 professional, Renea’ Camper, to help you get started looking for just the right home today.