Have a real estate question that relates to financing? I might have the answer for you.
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Today I am joined by Gail Hillman of Waterstone Mortgage to answer three common financing questions I have been asked lately.
1. If you are thinking of buying a home, how much money do you need to have saved up?
According to Gail, the answer depends on what type of loan you are getting and what down payment is required. For example, a USDA loan requires zero money down. An FHA loan also only requires a 3.5% down payment. Conventional loans can go as low as 3% as well.
On top of that, you will also have closing costs. So, if you were to buy a $300,000 house with a conventional loan at 3% down, you would have to pay a $9,000 down payment and pay $7,000 in closing costs, which equals out to $16,000 total. This can all come as a gift, though, so you don’t necessarily need the money yourself.
To answer the first question, a pre-approval is good for 60 days. As far as any changes that happen with your income and assets, yes that does have to be reported, and you are better off telling your lender of any changes up front so they can fix it. If they learn about something like that halfway through the process, the situation becomes much stickier.
3. How do loans function for second homes?
By “second homes” in this instance, we mean vacation homes—not investment homes. These loans require 10% down for the same interest rate as a regular home.
If you have any more financing questions, feel free to reach out to Gail by phone at (972) 200-3253. You can email her at ghillman@waterstonemortgage.com.
As always, if you have any other questions or real estate needs, please feel free to call or email me anytime. I would love to help you.
1. If you are thinking of buying a home, how much money do you need to have saved up?
According to Gail, the answer depends on what type of loan you are getting and what down payment is required. For example, a USDA loan requires zero money down. An FHA loan also only requires a 3.5% down payment. Conventional loans can go as low as 3% as well.
On top of that, you will also have closing costs. So, if you were to buy a $300,000 house with a conventional loan at 3% down, you would have to pay a $9,000 down payment and pay $7,000 in closing costs, which equals out to $16,000 total. This can all come as a gift, though, so you don’t necessarily need the money yourself.
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2. How long is a pre-approval good for? What if income and assets change? Does that have to be reported?
How much you need to save up for a home purchase depends on what loan you are getting.
”To answer the first question, a pre-approval is good for 60 days. As far as any changes that happen with your income and assets, yes that does have to be reported, and you are better off telling your lender of any changes up front so they can fix it. If they learn about something like that halfway through the process, the situation becomes much stickier.
3. How do loans function for second homes?
By “second homes” in this instance, we mean vacation homes—not investment homes. These loans require 10% down for the same interest rate as a regular home.
If you have any more financing questions, feel free to reach out to Gail by phone at (972) 200-3253. You can email her at ghillman@waterstonemortgage.com.
As always, if you have any other questions or real estate needs, please feel free to call or email me anytime. I would love to help you.
