Are you ready to purchase a home in Summit or Park County? Buying a home can be just as exciting as it is stressful. And if you’re new to the housing market you probably have a lot of questions. One common question that we get is regarding down payments. How much do you need to have saved to purchase a home in Summit or Park County? This depends on the lender and the loans they offer.
Conventional wisdom tells us that home buyers will need to put 20% down to purchase a home. But this isn’t always the case; in fact, there are some lenders that have loans with a lot less down payment, and, if you are a veteran you likely qualify for a VA loan, which doesn’t require you to put anything down when purchasing a home.
The most common mortgage options are a conventional mortgage and an FHA mortgage. We’ll share some differences between the two and explain how it affects your down payment but the most reliable source of information on the loan type that will be best for you is a mortgage professional in your local area. If you’re looking for a recommendation in the Summit or Park County areas we have several that you can contact and would be happy to point you in the right direction. You can email us here!
A Conventional Mortgage
Traditional lenders (like mortgage companies, credit unions, and banks) finance conventional mortgages. Most of these lenders prefer borrowers with 20% down payments, but some offer as low as 3% down if you meet certain income limits. Lenders will look at your credit, income, and other factors when determining your loan options. One additional thing to consider is private mortgage insurance (PMI). You will likely be required to purchase PMI if you use a traditional lender. But if you qualify for 3 or 5% down this may not be the case. Your Mortgage Broker will be able to help determine what loan best fits you.
An FHA Mortgage
Federal Housing Administration (FHA) loans are another common mortgage option with more lenient qualifications. These types of mortgages can offer you as little as 3.5% down if you qualify. In order to qualify for an FHA loan, buyers with lower credit scores will need to meet other requirements.
We always recommend that our clients communicate with a Mortgage Professional prior to looking for a home to completely understand how much home they can purchase. It can be extremely disappointing (and time-consuming) to find your dream home only to find out that you’ve been looking at homes in the wrong price range.
A good local Realtor will undoubtedly be able to recommend a number of excellent mortgage brokers or lenders who will work with you to determine how much house you can actually afford.
How Can We Help?
We hope that you’ve found this information useful. If you need buying or selling guidance or help in the Summit or Park County area please reach out! We will also continue to provide you with relevant and up-to-date information here on our blog.
If you would like more information on how the Summit and Park County real estate market is doing, you can also sign up for our detailed monthly market report by clicking this link.
Best Regards,
Scott & Anne Lindblom
Broker Associates
[email protected]
[email protected]
Scott: 970-485-4065
Anne: 608-345-2734
www.LindblomGroupe.com