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It’s common to put 20% down, but many lenders now permit much less. But putting down less than 20% may mean higher costs and paying for mortgage insurance,and even a small down payment can still be hefty. For example, a 5% down payment on a $200,000 home is $10,000.
There are lots of mortgage options out there, each with its own combination of pros and cons. If you’re struggling to come up with a down payment strategy, contact a specialist. Making a higher down payment will mean having a lower monthly mortgage payment. If you want the smallest mortgage payment possible, opt for a 30-year fixed mortgage. But if you can afford larger monthly payments, you can get a lower interest rate with a 20-year or 15-year fixed loan.
In addition to federal programs, many states help programs for first-time home buyers with perks such as down payment assistance, closing cost assistance, tax credits and discounted interest rates.
When applying for a mortgage loan, your credit will be one of the key factors in whether you are approved, and it will help determine your interest rate and possibly the loan terms. Dispute any errors that could be dragging down your credit score and look for opportunities to improve your credit, such as making a dent in any outstanding debts.
You can get pre-qualified for a mortgage, which simply gives you an estimate of how much a lender may be willing to lend based on your income and debts. But as you get closer to buying a home, it’s smart to get a preapproval, where the lender thoroughly examines your finances and confirms in writing how much it's willing to lend you, and under what terms. Having a preapproval letter in hand makes you look much more serious to a seller and can give you an upper handover buyers who have not taken this step. If you need help getting a preapproval letter, please contact a specialist.
You’ll be working closely with a real estate agent, so it’s essential that you find someone you get along with well. The right buyer's agent should be highly skilled,motivated and knowledgeable about the area, and is familiar with the your buying options. To get in contact with an official agent of LasVegasDPA.com, schedule a call.
In addition to saving for a down payment, you will need to budget for the money required to close your mortgage, which can be significant. Closing costs generally run between 2%and 5% of your loan amount. You can shop around and compare prices for certain closing expenses, such as homeowner’s insurance, home inspections and title searches.
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