Another good rule is that it rarely makes sense to buy if you expect to move within two years. That s because when you do sell, there are costs associated with selling. We re not just talking about sales commissions to the buying and selling real estate brokers. But the total cost of the real estate transaction. This can included just moving to the house. Most owners rely on home appreciation to pay those costs and to provide the down payment and closing costs when they buy their next home. So buying a home when you expect to move before too long is a risk, especially in an uncertain market. In the Denver area home prices should remain steady the next few years. Meaning you will not recoup this cost. So you need to be really careful when you are deciding on your next house. You don t want to lose money on the transaction anytime soon.
Is it time for you to buy a home? There are things to think about before buying a home other than whether you have enough down payment. But this days down payment is a big issue. Speaking of down payment, many first time home buyers look at how much they need down and try to figure out whether they can afford (or qualify for) what the mortgage payment will be. The minimum for down payment today is 3 . This is only if you are using a FHA loan. Or a federal housing administration type loan. This is a government back program that helps first time buyers get in to a house. This is just the minimum for a down payment. The program might even require you to put more that this down. This cases come up it there are other problems with the loan. Some of this problems might be credit score, monthly income, credit history, time on the job.
A good example of this is that your debt ratio is 45 . The is casing you not to qualify for this particular loan program. One thing you could do is put more money down on the house. In this example you would put 10 down on the property. Now that you have put that huge chunk of change on the property your debt ratio has come down to a respectable 41 . Now that is 41 you can qualify for the loan. I know that is a lot of money to put down but it was what was needed to get you in the house.
But keep in mind the other option to a FHA loan right now is a conventional loan. A conventional automatically requires you to put 10 as a down payment. Under this loan program the minimal money to put down on property is 10 . Some times it just does not make much sense putting that much money down on a property. You might need that money for reserve. If something like a lay off happens that you were not expecting. It would be nice to still have that cushion in your bank account.
Author Resource:-
Information written about http://www.coloradomortgage.me by Mr. Ross. His subject is Colorado Mortgage
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