Saving For The Down Payment

When deciding to purchase a house you should start by getting your finances in order. Run your credit report and verify that all the information on it is accurate. If you have any negatives on your credit report, try to resolve those issues. All of these things will affect your fico score, which then effects how much of a mortgage you will qualify for and the interest rate for your loan. Try to pay down your debt and even more importantly pay your bills on time for 1-2 years minimum. If you are thinking of changing jobs, maybe you should keep your current because lenders like to see a steady employment history of two years at the same job. 

This is also a great time to gather all your financial paperwork together. Evaluate what you are spending your money on and what interest rates you are paying. Transferring your debt to low interest accounts and paying off higher interest loans will put more money to your debt instead of interest. Setting a budget is a great thing to do when saving for that down payment. Tracking it monthly and staying on track is important for the goal of homeownership.

By establishing a budget, you will know how much house mortgage payment you can afford. This will prevent you from being house poor, which is when you own a great house but cannot afford anything else. Also keep in mind that the down payment is not the only cost you will need in the buying process. You will need closing cost, inspections, and homeowners insurance.

With a good credit score you can buy a house with 3 to 5% down. You may be able to negotiate that the seller will pay closing cost, especially in today’s buyers market.  This may be the best chance that the seller has in selling their house, and therefore becomes a great savings for you.

Many lenders offer options with 5-10-20% down payments. Zero percent is still sometimes available but harder to obtain, especially after recent lending practices and sub prime loan defaulting. One can still qualify for financing programs through the department of veterans Affairs-VA or Federal Housing Administration –FHA, both of which require only a small down payment.

Therefore, getting your financial affairs in order is top priority, and then you will be able to finding a lender who can offer you the best possible home loan.  In this current market with so many choices, you may find a home with more than you thought possible at a great price. Interest rates are still low, so this is another reason to consider homeownership.

After having a down payment saved and your ending approval, now you are ready to search for that perfect Cocoa Beach FL Real Estate

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