Saving for Your FHA Loan
January 27, 2024
What do house hunters need to save and plan for when buying a house in 2024? A few items have always been on the planning and saving list but have moved up in importance during the seller’s market in years past.
What should your saving priorities be in the earliest days of your home loan planning and saving phase?
FHA Home Loan Down Payment
The down payment issue is a no-brainer for most, but you might be surprised at your choices when planning for this expense.
Yes, FHA borrowers typically save for a 3.5% down payment. Still, in 2024, you should seriously consider making a bigger-than-typical down payment to save more on interest rates over the loan term.
Higher interest rates mean a more expensive loan, but paying more down lowers the overall interest debt on the loan over time. You should also consider applying for down payment assistance if you qualify.
The catch here is that you should also add your own down payment funds on top of those provided to pay down more of the loan upfront.
Home Inspection
We constantly tell readers, “For your protection, get a home inspection,” like the FHA and HUD do. In a seller’s market, there is pressure on borrowers to skip the inspection because there is so much competition for a new home.
And while the seller’s market situation may not apply at press time, the importance and urgency of a home inspection is still a major factor to consider. Do NOT skip the home inspection UNLESS you don’t mind paying for unexpected repairs after you move in.
Title Searches
Why is a title search on a home important in 2024? Because so much economic damage happened to Americans during the pandemic, you may encounter an elevated risk of a lien attached to the real estate or other issues that may only be uncovered through a title search.
LegalZoom notes, ”Title searches are crucial before buying or selling real property, as they might unearth an issue that could hinder the transfer of the deed. A buyer might identify a hidden debt attached to the property or a lien that might make their lender back out, while a seller might learn they don't even have the legal right to sell.”
You’ll want to save money for this expense early and anticipate any expense related to clearing up a problematic title.
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Let's Talk About Home Equity
Understanding Your Loan Term
A Few Words About Bankruptcy
What should your saving priorities be in the earliest days of your home loan planning and saving phase?
FHA Home Loan Down Payment
The down payment issue is a no-brainer for most, but you might be surprised at your choices when planning for this expense.
Yes, FHA borrowers typically save for a 3.5% down payment. Still, in 2024, you should seriously consider making a bigger-than-typical down payment to save more on interest rates over the loan term.
Higher interest rates mean a more expensive loan, but paying more down lowers the overall interest debt on the loan over time. You should also consider applying for down payment assistance if you qualify.
The catch here is that you should also add your own down payment funds on top of those provided to pay down more of the loan upfront.
Home Inspection
We constantly tell readers, “For your protection, get a home inspection,” like the FHA and HUD do. In a seller’s market, there is pressure on borrowers to skip the inspection because there is so much competition for a new home.
And while the seller’s market situation may not apply at press time, the importance and urgency of a home inspection is still a major factor to consider. Do NOT skip the home inspection UNLESS you don’t mind paying for unexpected repairs after you move in.
Title Searches
Why is a title search on a home important in 2024? Because so much economic damage happened to Americans during the pandemic, you may encounter an elevated risk of a lien attached to the real estate or other issues that may only be uncovered through a title search.
LegalZoom notes, ”Title searches are crucial before buying or selling real property, as they might unearth an issue that could hinder the transfer of the deed. A buyer might identify a hidden debt attached to the property or a lien that might make their lender back out, while a seller might learn they don't even have the legal right to sell.”
You’ll want to save money for this expense early and anticipate any expense related to clearing up a problematic title.
------------------------------
RELATED VIDEOS:
Let's Talk About Home Equity
Understanding Your Loan Term
A Few Words About Bankruptcy
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