![]() ![]() Neither nor its advertisers charge a fee or require anything other than a submission of qualifying information for comparison shopping ads. We do not offer or have any affiliation with loan modification, foreclosure prevention, payday loan, or short-term loan services. The opinions presented on should not be construed as representing the official opinions of any government agency. ![]() Our goal is to educate our readers as to the many ways they can achieve home ownership.į is a private company, not affiliated with any government agency, is not a lender and does not offer to make loans. We offer a full video library on the definitions of many basic mortgage terms. ![]() Site Map | Terms of Service | Privacy Policy | About Us | SecureRights Advertiser Contact Informationį is a digital resource that publishes timely news, information and advice concentrating on FHA, VA and USDA residential mortgage lending. The lender is required to make sure your down payment does NOT come from any prohibited sources.Īsk a loan officer about these procedures if you aren’t sure how to go about accepting down payment gifts. The reason for these rules? Down payment money cannot come from certain sources such as credit card cash advances, payday loans, pink slip loans, etc. If your gift-givers don’t follow the lender’s requirements you may not be permitted to use the funds for your loan transaction. These gifts must be given to the borrower in a manner proscribed by the lender–ask your loan officer how down payment gifts must be submitted sourced, and verified. You can also get down payment gifts from a friend, family member, employer, etc. You cannot finance the down payment, but some borrowers choose to apply for local down payment assistance programs that can help offset some or all of the down payment cost to the borrower up front. The other expense you’ll need to save up for is the down payment, which is 3.5%. Some borrowers might choose to finance the premium just to reduce their up front costs, but others may finance it so they can pay for other closing costs in cash such as purchasing discount points to reduce the amount of interest on the mortgage. You can’t pay part in cash and finance the rest. What’s the catch? You must either pay the entire amount in cash on closing day OR finance the entire amount into the mortgage. But one important feature to remember about the Up-Front Mortgage Insurance Premium is that you do not have to pay it in cash up front at closing time.īorrowers have the option to include the premium in the loan amount instead. In the case of the Up-Front Mortgage Insurance Premium, your cost will be a percentage of the loan amount–1.75% at the time of this writing. And part of being ready is understanding what costs you may be responsible for up front.ĭo you know what to anticipate needing to have saved for your new loan? There are two important areas to begin with–your down payment, and the FHA Up-Front Mortgage Insurance Premium which is part of your closing costs.īoth the down payment and the UFMIP calculations require at least a rough estimate of what the asking price of the home and/or the amount of the mortgage might be you can ballpark the price of the home and run the calculations to get an estimate of what you are required to save. Without enough lead time to save for your up front costs and prepare your credit you may fill out an application without being truly ready. The amount of planning and saving time you give yourself ahead of your home loan application is very important. ![]()
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