Take the Guesswork Out of Your Home Loan
If you start gathering these answers early in the home loan planning stages you will find they can help you better plan and save for your home loan.
How Much Is My FHA Home Loan Down Payment?
First time home buyers sometimes assume there is a fixed number for the down payment depending on the size of the home or other factors. But the reality is that down payments are based on a percentage of the adjusted value of the property as determined by an appraisal.
The appraisal will tell the lender how much your down payment is, but you can get a rough idea by multiplying the asking price of the home by the FHA loan minimum required down payment of 3.5%. If the appraisal comes in higher or lower, you will need to make those calculations again with the appraised value, but in very general terms this is a good way to get a rough idea of what you need to save.
How Much Is My Monthly Mortgage Payment?
You can use an online mortgage calculator to determine the amount of your down payment, but you will need some extra information-estimated down payment, property taxes, the amount of mortgage insurance required (FHA home loans require a mortgage insurance premium for either 11 years or the lifetime of the mortgage depending on the LTV and other factors).
Use an online mortgage calculator to get an estimate of your monthly payment, but remember that this is not the exact amount you may pay depending on how much money down you pay, whether you include add-ons to the loan for financed closing costs where permitted, the Up Front Mortgage Insurance Premium, etc.
How Much Can The Seller Contribute To My Down Payment?
The seller is NOT ALLOWED to contribute funds toward your down payment. But the seller is permitted to contribute up to six percent of the sale price of the home toward your closing costs, and that frees up money for you to use on your down payment instead.
This seller contribution is not automatic-you must negotiate this with the seller and the seller must agree to make the contribution. It’s a good leveraging tool in some cases-if the seller is asking a bit too much, you could negotiate this contribution as an incentive to close the deal.
Ask your lender for any information on state law or lender standards that could affect these negotiations.
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