Posted on: 19th Mar, 2012 01:44 am
I had decided to buy a house and have thus started taking care of the credit few months back. Presently, I have a credit score of around 680. Recently, I also removed a judgment has been removed so it may have improved further. I am also trying to save money every month for down payment. How much should we save for down payment? Is it true that we will need to set up an escrow account and if so how much we should expect to need for that? Is there anything else we should be doing to get ready?
Hi Bandana,
You should have 20% down payment if you want to qualify for a conventional loan. If you want to go for a FHA loan, then you will require a down payment of 3.5% - 5%. So, depending upon the mortgage amount, you will have to decide upon your savings.
As far as escrow account concerned, your lender will want you to set up that account. The money that you pay him every month for insurance payments and property taxes will be deposited in that account. At the end of the year, the lender will pay those dues from your escrow account.
Thanks,
Jerry
You should have 20% down payment if you want to qualify for a conventional loan. If you want to go for a FHA loan, then you will require a down payment of 3.5% - 5%. So, depending upon the mortgage amount, you will have to decide upon your savings.
As far as escrow account concerned, your lender will want you to set up that account. The money that you pay him every month for insurance payments and property taxes will be deposited in that account. At the end of the year, the lender will pay those dues from your escrow account.
Thanks,
Jerry
Fannie Mae conventional loans require a 3.00% down payment.
The credit score must be at least 680 to get the required Private Mortgage Insurance
The mortgage interest rate and the PMI rate will be better if credit score is over720 and better again if over 760
FHA loans require a minimum 3.50% down payment and a credit score of at least 620, typically.
The amount you will need for closing costs depends on the state you are in, the size of the mortgage and the purchase price, the annual property taxes and home insurance, etc..
If you at least identify the state, maybe someone can answer you better as far as closing costs.
In New Jersey, for example, you would need between $6,000 and $9,000. This can be a gift from a relative or you may get it paid by the Seller or maybe the lender can rasie the rate a little and pay some or all.
The point is, when you have your 3.50% down payment, contact a mortgage loan officer to get prequalified and start looking for the house.
The credit score must be at least 680 to get the required Private Mortgage Insurance
The mortgage interest rate and the PMI rate will be better if credit score is over720 and better again if over 760
FHA loans require a minimum 3.50% down payment and a credit score of at least 620, typically.
The amount you will need for closing costs depends on the state you are in, the size of the mortgage and the purchase price, the annual property taxes and home insurance, etc..
If you at least identify the state, maybe someone can answer you better as far as closing costs.
In New Jersey, for example, you would need between $6,000 and $9,000. This can be a gift from a relative or you may get it paid by the Seller or maybe the lender can rasie the rate a little and pay some or all.
The point is, when you have your 3.50% down payment, contact a mortgage loan officer to get prequalified and start looking for the house.
