“How Much Money Do I Need for a Downpayment?” is the first installment of three videos for first time homebuyers, or anyone who needs a refresher in how much down payment money they will need to buy a house.
In this short video, I talk about the basic differences between how much you’ll need to do a conventional, FHA or VA loan.
“You may not need as much money as you think for downpayment, especially if you’re a first time homebuyer.
Before we talk about exactly what you’ll need, let’s talk about the three basic loan types: conventional, FHA and VA.
VA loans are for active duty military people, or anybody who has been honorably discharged. It’s a terriffic loan program that allows them to put zero down.
Everyone else has to choose between Conventional or FHA.
Conventional loans are great if you have 20% to put down. If you do, then you’ll save every month on what’s called mortgage insurance or PMI; you won’t have to pay it.
However, if you’re like most first time homebuyers, you don’t have that kind of money saved up yet, so you’ll probably opt to do an FHA loan.
FHA loans only require 3.5% down. So on a $150,000 house, that’s 5,250 dollars, and while that may sound like a lot of money, remember that a conventional loan that requires 20% is going to require you to bring $30,000. So I think you can agree, $5,000 sounds a whole lot better.
Now that’s not the only cash you’re going to need to close on your new home, you’re going to need some for closing costs too, but we’ll talk more about those in the next video.”
by Albuquerque Real Estate Agent Rich Cederberg. Please call or text me (505) 803-5012.