Getting pre-approved for a mortgage is the first step of the home buying process. Getting a pre-approval letter from a lender get the ball rolling in the right direction. by getting pre-approved you will know exactly how much you can borrow, how much the down payment and closing cost will be. A pre-approval also demonstrate that you are a seller and your real estate agent.
Once a home is selected and the offer is accepted, the average time to complete the purchase transaction on a home is 30 to 45 days (under normal market conditions).
Though, well-prepared home buyers and buyers who pay cash have been known to purchase properties faster than that.
Most loan programs require a FICO score of 620 or better even though the minimum is 580. There are some borrowers with higher credit scores represent less risk to the lender, often resulting in a lower the down payment requirement and better interest rate. Conversely, home shoppers with lower credit scores may need to bring more money to the table (or accept a higher interest rate) to offset the lender’s risk.
The amount required for a down payment will depend on the loan program your using. first-time homebuyers usually only put down 3 to 5% on a home, that’s because several first-time home buyer programs don’t require big down payments. A longtime favorite, the FHA loan, requires 3.5% down.
For many years, conventional loans required a 20% down payment.
These types of loans were typically taken out by repeat buyers who could use equity from their existing home as a source of down payment funds. However, some newer conventional loan programs are available with 3% down if the borrower carries private mortgage insurance (PMI).
Closing cost is all the fees associated with the purchase or sale of a property. Both buyers and sellers pay closing costs to the service providers and government agencies who help facilitate the transaction. typically, the buyer’s closing cost is broken down into three categories lender fees, recording fees, and Title fees.
