FHA vs. Conventional Loans: Which Is Better?

When it comes to affording a new home, you have a few types of home loans to choose from. Prospective homebuyers often compare the FHA vs. the conventional loan when researching loans. Each loan type has certain stereotypes associated with them, but we are here to give you the facts about both FHA and conventional loans. This post will help you understand what each loan is, familiarize you with the differences between them, and provide some guidelines for how to pick which one is best for you.

What Is An FHA Loan?

An FHA loan is insured by the Federal Housing Administration (FHA). These loans are issued by private lenders, but lenders are protected from losses by the FHA if the homeowner fails to repay. FHA loans are generally used to refinance or buy a home.

What Is A Conventional Loan?

A conventional loan is supplied by a private lender and isn’t federally insured. Requirements for obtaining a conventional loan vary depending on the lender. When used to buy property, conventional loans are typically known as mortgages.

What Is A Conventional Loan?

Differences Between FHA and Conventional Loans

The main difference between FHA and conventional loans is whether or not they are insured by the federal government. Conventional loans aren’t federally backed, so it’s riskier for the lender to loan money. On the other hand, FHA loans are protected by the government, and as a result of less risk, they can typically offer better deals.

This difference in federal insurance is the reason why FHA and conventional loans vary when it comes to the details of the loan. Keep reading to learn the differences regarding credit requirements, minimum down payments, debt-to-income ratios, loan limits, mortgage insurance, and closing costs.

FHA Loan Conventional Loan
Minimum Credit Score 500 620
Minimum Down Payment 3.5% 3%
Maximum Debt-to-Income Ratio Credit score of 500: 43%
Credit score of 580+: 43-50%
Credit score of 620: 33-36%
Credit score of 740+: 36-45%
Loan Limits Low-cost counties: $356,362
High-cost counties: $822,375
Contiguous US: $548,250
High-cost counties, AK, HI, and US territories: $822,375
Mortgage Insurance Mortgage insurance premiums required. Private mortgage insurance required with down payments less than 20%.
Property Standards Stricter standards, property purchased must be a primary residence. Flexible standards, property purchased doesn’t have to be a primary residence.

Sources: FHA Single Family Housing Policy Handbook | Fannie Mae 1 2 | Federal Housing Finance Agency | Freddie Mac | HUD 1 2 | Consumer Financial Protection Bureau 1 2

Credit Score

Your credit score is a determining factor in your loan eligibility. Your credit score is measured on a scale of 300 (poor credit) to 850 (excellent credit). Good credit helps you get approved for loans more easily and at better rates. FHA and conventional loans differ in their credit score requirements and represent financial options for individuals at either end of the credit spectrum.

Minimum Credit Score for FHA Loan: 500

  • Accepts a credit score as low as 500, but usually with a 10% down payment
  • These loans accept lower credit scores because they are insured
  • Note: Some lenders may only issue FHA loans with higher credit scores

Minimum Credit Score for Conventional Loan: 620

  • Accepted score may vary from lender to lender
  • These loans are usually offered to individuals with strong credit because they present less risk to lenders

Minimum Down Payment

A down payment is the sum of money that is paid as a percentage of your purchase up-front.

Minimum Down Payment on an FHA loan:

  • 10% of your purchase with 500 credit score
  • 3.5% of your purchase with 580+ credit score

Minimum Down Payment on a Conventional Loan:

  • 3% of your purchase can be put down with good credit
  • 5% to 20% of your purchase price is typical

Debt-to-Income Ratio

Your debt-to-income ratio is the amount of money paid toward debt each month divided by your total monthly income. To be eligible for a loan, you must be at or below the maximum debt-to-income (DTI) ratio.

Maximum DTI Ratio Guidelines for FHA loans:

  • 43% with a credit score of 500
  • 43–50% with a credit score of 580

Maximum DTI Ratio Guidelines For Conventional Loans:

  • 33-36% with a credit score lower than 740
  • 36-45% with a credit score of 740 or higher
  • 50% highest allowed through Fannie Mae

Loan Limits

Both FHA and conventional loans have limits on the amount that you can borrow. Loan limits vary based on your location and the year your loan is borrowed. Find 2021 loan limits specific to your county through the Federal Housing Finance Agency.

2021 FHA Loan Limits

  • High-cost counties: $822,375
  • Low-cost counties: $356,362

2021 Conventional Loan Limits

  • Contiguous US (excluding high-cost counties): $548,250
  • Alaska, Hawaii, US territories, and high-cost counties: $822,375

Mortgage Insurance

Mortgage insurance is taken out to protect the lender from losses in case you fail to repay your loan. Whether you will pay private mortgage insurance or mortgage insurance premiums is based on your loan type and down payment percentage.

FHA Loan

  • Mortgage insurance is required for all FHA loans.
  • It is paid to the FHA in the form of mortgage insurance premiums and includes an up-front and monthly premium.
  • MIP payments last the entire life of your FHA loan.
  • To get rid of MIPs after paying 20% of your loan, you can choose to refinance into a conventional loan.

Conventional Loan

  • Private mortgage insurance (PMI) is only required when a down payment below 20% is made.
  • PMI comes in different forms: monthly premium, up-front premium, and split premiums.
  • PMI requirements stop once you have met one of three requirements:
    1. Principal loan amount is reduced to 80% before the loan term ends.
    2. At least 78% of the principal balance is scheduled to be paid down.
    3. The halfway point of your loan term has passed.

Property Standards

There are different property standards that must be met to use each loan. FHA loans have stricter requirements, while conventional loans have more flexibility.

FHA Loan

  • Property purchased with FHA loans must be your principal residence, meaning the borrower has to occupy the residence
  • FHA loans can’t be used to invest in property (e.g., renting out or flipping)
  • Title must be in the borrower’s name or name of a living trust

Conventional Loan

  • Property purchased with a conventional loan doesn’t have to be a principal residence — second or third residences are allowed
  • Conventional loans can be used to purchase investment properties

Pros and Cons of FHA vs. Conventional Loans

As a result of the various differences between FHA and conventional loans, each type has its respective pros and cons.

FHA Loan

Conventional Loan

Pros

  • Qualify with low credit and high DTI
  • Smaller down payments overall
  • More affordable with low credit
  • Lowest option for down payments with good credit
  • PMI cancellable
  • More affordable with good credit
  • Property doesn’t have to be your main home

Cons

  • Mortgage insurance premiums required for life of loan
  • Property purchased must be your main home
  • Need higher credit and lower DTI to qualify
  • Typically has larger down payments
  • PMI required with a down payment less than 20%

Pros and Cons of FHA Loans

FHA loans are government-regulated and insured to extend flexible opportunities for homeownership. They’re flexible regarding credit and DTI, but stricter about insurance and property standards.

Pros

  • Flexible qualification with low credit and high DTI
  • Smaller down payments overall
  • More affordable with low credit

Cons

  • Mortgage insurance premiums required for life of loan
  • Property purchased must be your primary residence

Pros and Cons of Conventional Loans

Conventional loans can also offer flexibility, but generally only if you have good credit and demonstrate reduced risk to the lender. These loans have stricter qualifications, but flexibility in other areas.

Pros

  • Lowest option for down payments (3% with good credit)
  • Private mortgage insurance can be canceled (must meet requirements)
  • More affordable with good credit
  • Property purchased doesn’t have to be a primary residence

Cons

  • Strict qualifications require higher credit and lower DTI
  • Larger down payments are typical
  • Private mortgage insurance required with a down payment less than 20%

Which Loan Is Better For You?

Both FHA and conventional loans have their advantages and disadvantages. Here are some general guidelines for when to use an FHA loan or a conventional loan.

When To Use an FHA Loan

  • You have a low credit score (500–619)
  • Your DTI ratio is on the higher side (between 45–50%)
  • You can only afford a small down payment
  • You plan to use the property as your primary residence

When To Use an FHA Loan

When To Use a Conventional Loan

  • Your credit score is fairly good (620 or above)
  • Your DTI ratio is on the lower side (33–36%)
  • You can afford a larger down payment
  • You want flexibility with insurance and repaying your loan

When To Use a Conventional Loan

It’s important to thoroughly research your options before choosing a loan. A key takeaway when comparing FHA vs. conventional loans is that FHA loans are federally insured and conventional loans aren’t. This distinction results in different qualification and payment requirements for each loan.

Use the information in this post to carefully compare the differences in accepted credit scores, minimum down payments, loan limits, maximum debt-to-income ratios, mortgage insurance and property standards. In doing so, choose the loan that works for your circumstances and helps you best afford the home of your dreams.

Sources: FHA Single Family Housing Policy Handbook | US Dept. of Housing and Urban Development | Federal Housing Finance Agency | Freddie Mac

The post FHA vs. Conventional Loans: Which Is Better? appeared first on MintLife Blog.

Source: mint.intuit.com

Former OPI Exec Lists Italian-Style Villa in Beverly Hills for $33 Million

Miriam Schaeffer, a former executive at nail polish giant OPI Products, is looking to sell her Italian-style villa in Beverly Hills, CA — and won’t settle for just any amount.

The nail polish mogul — who is also the former wife of George Schaeffer, founder of the popular nail polish brand — is asking a hefty $33 million for her opulent home set in one of the most sough-after streets in the area, Roxbury Drive, a historically popular address among celebrities.

Located on N. Roxbury Drive, the property has a rich history and has been considerably upgraded and expanded in recent years. In fact, Schaeffer invested heavily in the property, expanding its footprint by roughly 40% and significantly boosting the amenity roster.

Originally built in 1926 by the architectural firm Camduff and Camduff as one of the partners’ own homes, the architectural masterpiece was revamped by renowned architect Richard Manion in 2016. The current owner worked alongside the architect to add amenities like a media room and a wine cellar, and to expand the beautiful grounds. 

Ua-luxurious villa on N. Roxbury Drive
Ua-luxurious villa on N. Roxbury Drive. Image credit: Simon Berlyn courtesy of The Agency

The combination of Spanish, Italian, and Mediterranean revival architecture is probably why this property is also known as Casa California. It’s a perfect representation of relaxed California living, featuring a long list of fun amenities that includes a fitness studio, a media room, a spa, and a swimming pool. 

The property offers roughly 210 feet of frontage along N. Roxbury Drive, also known as ‘street of the stars’ (a highly popular destination for celebrities living in Beverly Hills), but it also offers privacy from prying eyes via a gated and hedged entrance.

The mansion has 7 bedrooms, 13 bathrooms, and an impressive total of 13,765 square feet of living space. The rear grounds are home to the pool, the spa, a guest house, and a fitness studio, all surrounded by complete privacy and tranquility.

Inside, a two-story entry greets visitors, leading to a living room with a stunning fireplace and doors that open to the front grounds. There is also a state-of-the-art chef’s kitchen, complete with a breakfast room and a wood-paneled family room that opens to the pool. 

Living room of ua-luxurious villa on N. Roxbury Drive
Ua-luxurious villa on N. Roxbury Drive. Image credit: Simon Berlyn courtesy of The Agency
Kitchen of ua-luxurious villa on N. Roxbury Drive
Ua-luxurious villa on N. Roxbury Drive. Image credit: Simon Berlyn courtesy of The Agency
Ua-luxurious villa on N. Roxbury Drive
Ua-luxurious villa on N. Roxbury Drive. Image credit: Simon Berlyn courtesy of The Agency
Ua-luxurious villa on N. Roxbury Drive.
Ua-luxurious villa on N. Roxbury Drive. Image credit: Simon Berlyn courtesy of The Agency

Upstairs, there is a gorgeous master suite that incorporates a sitting room, custom-made closets, and a terrace with fabulous views. There’s no shortage of space for family or friends, as the upper levels also include no less than 5 guest suites. 

Bedroom of an ua-luxurious villa on N. Roxbury Drive.
Ua-luxurious villa on N. Roxbury Drive. Image credit: Simon Berlyn courtesy of The Agency

Additional amenities include a wine cellar, an elevator, an entertainment room, and a bar, making this house perfect for any type of entertaining. 

Entertainment room of an ua-luxurious villa on N. Roxbury Drive.
Ua-luxurious villa on N. Roxbury Drive. Image credit: Simon Berlyn courtesy of The Agency

This luxurious N. Roxbury Drive property is marketed by The Agency, with Jacob Dadon handling the listing. The current owner is Miriam Schaeffer, the former wife of George Schaeffer, who founded the popular nail polish brand OPI. 

Schaeffer bought OPI (then Odontorium Products Inc.) in 1981 in Calabasas. At the time, the company was in the dental supply business, but Schaeffer and partner Suzi Weiss-Fischmann turned the brand into a global nail polish giant. The brand’s products were used in movies like Legally Blonde 2 and Alice in Wonderland, and they are known for their chip-resistant formula and bright colours. The company was acquired by Coty, Inc. in 2010, and Schaeffer stepped down as CEO in 2013. 

Miriam Schaeffer, George Schaeffer’s ex-wife, once worked as an executive and treasurer for the brand. She reportedly purchased the opulent house in 2012 for $14 million, according to Mansion Global, and invested in expanding its footprint by nearly 40%, alongside architect Richard Manion. 

More beautiful homes with famous owners

Chrissy Teigen & John Legend Buy $17.5M Beverly Hills Mansion After Cashing Big on Previous Home
Morgan Brown Re-Lists Stunning West Hollywood Home Amid Split from Actor Gerard Butler
Kendall Jenner Gives Us a Tour of her Peaceful, Art-Filled Home
For $35K/Month, You Could Join the Ranks of the Hollywood Celebs Renting This House in Malibu

The post Former OPI Exec Lists Italian-Style Villa in Beverly Hills for $33 Million appeared first on Fancy Pants Homes.

Source: fancypantshomes.com

Finally, ‘Fixer Upper’ Is Back! Watch Chip and Jo Tackle One Hot Mess of a House

fixer upperDiscovery+

At long last, Chip and Joanna Gaines and their smash hit show “Fixer Upper” have returned, although with some changes. For one, the show is now called “Fixer Upper: Welcome Home”—and the season premiere has them faced with renovating the messiest house we’ve ever seen them tackle.

In the episode “A Neglected Home for Newlyweds,” Chip and Jo meet Laney and Lucas, an engaged couple in Waco, TX, who have bought a house filled, quite literally, with trash. The Gaineses will need to work hard to give the couple the honeymoon home they deserve, and have a $150,000 renovation budget to do it.

Here’s how they whip this wreck of a house into shape, which suggests that this season of “Fixer Upper” will be filled with surprises and inspiration galore.

Use indoor windows for a creative way to open up sightlines

office
This window cleverly connects the office to the kitchen.

Discovery+

The house includes a large front room, which Lucas plans to use as an office.

While workspaces are normally private, Jo and Chip want to open up this space and improve the home’s sightlines. So they install industrial windows into the office that look into the kitchen and living room.

While some designers might have busted down the office walls to give the whole house an open layout, these windows are a creative alternative to demolition.They make the office feel less isolated while still giving Lucas the quiet and privacy he’ll need when working.

When the room is finished, Joanna is happy with not only the function, but also the clean, industrial design.

“The industrial window looks amazing, and I think the idea of trying to bring in a little bit of that industrial feel to this, really kind of modern, minimal space, feels really unique,” Joanna says.

A dark stone fireplace lends an industrial look

fireplace
Joanna Gaines needed to bring some style into this living room.

Discovery+

When Chip and Jo first see Lucas and Laney’s new house, they’re not only shocked by the mess, they’re also disappointed by the old-fashioned design.

The living room is especially dated, with a fireplace that desperately needs a refresh. Jo plans to update the feature with a sleek, dark stone that’s perfect for Laney’s industrial tastes.

fireplace
Laney wanted wood storage in her new fireplace, even if it wasn’t in the original design plans.

Discovery+

Yet instead of keeping the slab looking plain and minimalist, Laney makes a change to Jo’s design, requesting a cubby for wood storage. This doesn’t necessarily go with the industrial look Jo planned for, but this designer is willing to make a change. In the end, the wood ends up making the fireplace look even cozier than before.

Centered windows give a room balance

window
Chip and Jo realized, at the last minute, this window wasn’t centered.

Discovery+

Chip and Jo want to give this young couple a cozy dining space, so they design a built-in banquette with midcentury modern charm. However, in the middle of renovation, they realize that the window isn’t centered on the wall, making the space feel awkward.

They know that the wonky window will make the new table look strange, so they put in the extra effort to move the window. They finish the room with the banquette, a midcentury-inspired light fixture, and a beautiful wood table. The furnishings look great and they’re all perfectly centered—giving the room a balanced look.

table
This centered window makes the space look larger.

Discovery+

When the dining space is finished, Joanna explains that the new window placement makes the space feel so much bigger.

“This window is really close to this door here, and everything was, like, shoved this way, so we had to center your window,” she says. “Now, I feel like the space was really tiny, but now you’ve got space.”

Use wood paneling as an accent wall

bedroom
This bedroom was a catastrophe when Jo and Chip found it!

Discovery+

Laney loves simple, Scandinavian looks, but also digs midcentury modern style. So for the bedroom, Joanna installs a feature wall that works for both styles.

“I like the idea of this really cool focal wall, really minimal but highly textural,” Joanna says.

bedroom
The wood paneling gives this bedroom that midcentury modern look Laney and Lucas love.

Discovery+

She uses vertical wood paneling, which are reminiscent of paneling from midcentury homes, while choosing a light color and a simple black handle for the hidden bathroom door, which is in line with Scandinavian design.

The feature wall ends up looking gorgeous. It brings so much style to the room while seeming versatile enough to work with almost any style.

Dark colors in the bathroom add a moody vibe

bathroom
This bathroom was covered in wallpaper.

Discovery+

Laney says she likes dark tones, so Joanna wants to give Lucas and Laney’s master bathroom a moody makeover in dark green. She chooses a deep green paint color, then pairs it with green tile and wood vanities, and lightens it all up with light floors and counters.

When the room is painted and nearly finished, it looks great, but Joanna isn’t satisfied with the ceiling.

“When I walked into the bathroom, I really love what’s going on with all the textures and the pattern and the colors. Then when I look up, when I see the white ceiling, it’s almost like we stopped,” Joanna says. “The ceilings are kind of cut in a weird angle, and I don’t want to highlight that.”

So she has the ceiling painted dark green to match the walls.

While Chip is concerned this will make the space feel too dark, once the room is finished, it’s clear that painting was the right choice. The darker ceiling gives the space a cozy but glamorous feel that highlights the beautiful tiles and clean, white bathtub.

bathroom
This dark green color makes the white finishes stand out.

Discovery+

The post Finally, ‘Fixer Upper’ Is Back! Watch Chip and Jo Tackle One Hot Mess of a House appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com

How to Keep Common Summer Pests Away from Your Home

If you’re spending more time outdoors, then you’re probably not alone. Here are some easy tricks and natural hacks to get rid of those unwanted summer pests.

The post How to Keep Common Summer Pests Away from Your Home appeared first on Homes.com.

Source: homes.com

Home Buyer Checklist: What to Look for in an Open House

Open houses may be staged to look like a home decor dream, but don’t let that distract you from the real reason you’re there: to potentially buy a home. Make sure you can look past the neatly arranged furniture and focus solely on whether the house would be a good fit for you and your family. To help, here’s a home buyer’s checklist of things you might have missed at first glance.

Windows – Look specifically if they are facing the right direction to let sunlight in, and whether they open to a nice view (versus directly toward another neighbor’s window).

Under the Sink Cabinets – Check for possible signs of water damage due to leaky plumbing.

Electrical Outlets – Make sure there are enough outlets for the appliances and other electronics you’ll be using. If not, you can decide if that’s a renovation you’d like to make.

Storage Space – Don’t just look to see if there’s enough closet space, but look for closet placement. Also check that the storage is in a convenient location.

Appliances – If they’re included in the house, make sure they’re in good condition. They should be on and working while you’re there.

Under the Rugs – Lift up any rugs to check the condition of the floor underneath.

Floor Level – Check to see if the floors are level. Place a marble or another small, round object on the floor and see if it rolls consistently in one direction.

Attic – If the house has one, make sure it’s well insulated.

Water Spouts – Runoff from the gutters should be pointed away from the house, so take a step outside to see if this is the case.

This list isn’t all-inclusive, but it’s a good place to start. Talk to a CENTURY 21 ® agent to see what else he or she might add.

The post Home Buyer Checklist: What to Look for in an Open House first appeared on Century 21®.

Source: century21.com

5 Ways to Keep Winter Decor Bright

Traditionally, spring and summer corner the market on bold, bright colors, with fall and winter ushering in richer, more muted tones. However, this year’s popular colors, featured in Shutterfly’s Hottest Hues Guide, have a versatility that helps enhance decor year-round. Incorporate pops of modern color trends into everyday home accessories to warm up your house and your heart in the cool days ahead.

Fall Harvest, see larger

1. Set a Color-filled Table

’Tis the season for holiday dinners, and your dining room table is the perfect place to fill your room with color. Saturate your tablescape with chargers, plates, placemats and napkins in festive colors. Deep reds and burgundies are not only perfect for the holidays, but they add warmth to your tablescape throughout the winter season. But don’t limit yourself to the standard red and green—get creative with color palettes as you set your table, bringing in metallic and unexpected shades for a dose of fun!

2. Patch it Together

Invite color to visit by adding seasonally inspired throw pillows or a practical and colorful quilt to your couch or bed. Think outside of your regularly colored box, and experiment with contrast to create a cozy space without committing to a color scheme.

Room filled with daylight, see larger

3. Bring the Outdoors In

Flowers lend a festive touch as well as a hint of brightness to any area. A bold spray of pink orchids or peonies can add a pleasantly surprising shock of color to a sleek neutral winter space. Just because it’s winter doesn’t mean you’re stuck with poinsettias. Pale pink is enjoying a comeback in the design world as a romantic neutral with a range of versatility—and rose quartz just happens to be one of Pantone’s colors of the year for 2016. As interior redesign specialist Wendy Wrzos says, “In fall, it can be paired with a rich brown and cream. In winter, a touch of pale pink will add a cozy warmth to a room, or be an unexpected addition to the more saturated colors.” Pick your palette from a favorite bouquet for a touch of color you already love.

vibrant laundry room, see larger

4. Live a Little Large

Bring big color to a small space by painting your laundry room a bold color for brightness you can enjoy all year round. “The laundry room is a room that gets used all the time, and it is rare to see one that has been decorated. A painted wall and a colorful rug takes no effort at all, and will cheer it up in an instant.” —Wrzos advised. Use a small, out-of-the-way area to be brave with a shade that brings you joy when you see it.

Living room artwork, see larger

5. Hang It Up

The artwork in a room is often a focal point and the perfect place to feature color. With a foundation of neutral furniture, flooring, and walls, art and decor accessories can take center stage. Create a canvas or three-panel piece of art from a nature-inspired vacation photo and select a matching color palette to complement your art work. If you’re looking for a more seasonal do-it-yourself option, wrap poster frame inserts in pretty wrapping paper for a temporary triptych to match your holiday decorating scheme.

Between bad weather and Daylight Savings Time, winter feels dark enough. Fill your life with brightness all year round by incorporating color in easy, unexpected ways and bring a little more boldness and brilliance into your everyday world.

About the Author

Ashley McCann shares home décor tips for Shutterfly.com. She is a mom of two and enjoys reading and karaoke. For more from Ashley, you can find her on Twitter.

The post 5 Ways to Keep Winter Decor Bright first appeared on Century 21®.

Source: century21.com

How Much Money Do You Need to Buy a House?

Understanding how much money you need to buy a house can give you an idea of how much you should expect to save.

You’re probably excited about the thought of buying your first home? If so, you have every right to be.

But how much money do you need to buy a house? A calculator can help you determine that. But the average cost of buying a $300,000 is typically around $17,000.

In this article, we’ll go over the main costs of buying a house including the down payment, inspection cost, appraisal cost, closing cost, etc.

Check Current Mortgage Rate

How much money do you need to buy a house?

Out of Pocket Cost of buying a house

The five main out of pocket costs of buying a house are 1) the down payment; 2) inspection cost; 3) the appraisal cost; 4) earnest money and 5) closing costs. These out of pocket costs or upfront costs are money yo need to pay before you become the owner of the property.

In addition, some lenders also require you have some cash reserves to cover 2 to 3 months of the mortgage repayments.

Determining how much cash needed to buy a house depends on the type of loan you’re using.

Let’s suppose you’re buying a $300,000 house with an FHA loan.

An FHA loan requires a 3.5% of the home purchase price as a down payment as long as you have a 580 credit score. So, for the down payment alone, you will need $10,500.

Here’s a quick breakdown for how much cash needed to buy a $300,000 house:

  • Down payment: $10,500
  • Inspection cost: $300
  • Appraisal cost: $300
  • Closing cost: $6000

So, $ 17,100 is how much money you need to buy a house.

Whether you’re buying a house with a 20% down payment or 3.5% down payment, you can certainly find a loan with both the price and features to suit your needs as a first time home buyer. You can compare First Time Home Buyer home loans on the LendingTree website.

The down payment

The biggest cost of buying a house is obviously your down payment. But that depends on the type of loan you are looking for.

For example, a conventional loan requires a 20% down payment. You can pay less than that, but you will have to pay for a private mortgage insurance – which covers the lender in case you default on your loan.

A 20% down payment however can also mean that you’ll get a better interest rate, which also means you’ll save money on interest.

For an FHA loan, you only need 3.5% down payment as long as your credit score is 580.

FHA loans are very popular these days. Not only it’s easier to get qualified (low down payment and low credit score), but also your down payment can come from a friend, a relative or your employer.

Using our example above, you only need $10,500 for a down payment for a $300,000 house.

If you’re using a VA loan then you pay $0 down payment.

Check to see if you’re eligible for an FHA loan or VA loan

How much money do you need to buy a house also depends on other factors, such as whether you are a first time home buyer or not. Your state may have a range of programs that may contribute toward your down payment.

So visit your local government office to find out if you are eligible for any down payment assistance for first time home buyers.

Inspection cost

Another upfront cost of buying a home is the inspection cost.

It is highly recommended to perform inspection for your home for any defects so there are no surprises later on.

Inspections typically cost between $300 to $500, but it depends on the property and your local rates.

Compare home loans for first time home buyers with LendingTree

Appraisal cost

Before a lender can give you a loan to finance a house, they will want to know how much the house is worth. So appraisal means an estimate of the home’s value. A home’s appraisal usually costs between $300 to $500. A home appraisal will also determine what your property tax will likely be.

If you’re pay the home appraisal, it will be deducted from the closing cost. (see below).

Earnest money

Earnest money is a deposit you will have to pay upfront as soon as an offer is accepted, while you working on other aspects such as getting the home inspected, etc…

This deposit is part of the down payment, and it is usually between 1% to 3% of the final sale price. It is held by an escrow firm or attorney until the closing process is completed.

So if the sale is successful, that money is applied to your down payment. If it’s not, you get 100% of your money back.

Closing costs

The closing costs are fees by the lenders. They typically cost 2% to 5% of the final price. The costs include fees for homeowner’s insurance, title insurance, title insurance, property tax, HOA dues, private mortgage insurance.

It’s possible to lower these costs by comparing mortgage options.

Other costs of buying a home:

In addition to upfront costs, there are other recurring costs associated with buying a home. They include moving fees, repair costs, furniture, remodeling, etc. So consider these costs when making your budget to buy a house.

So how much money do you need to buy a house? The answer is it depends on the type of loans you’ re using. But if you’re buying a $300,000 house with an FHA loan, which requires a 3.5% down payment, $ 17,100 is how much money you need.

For more information about upfront costs of buying a house, check out this guide.

Read more cost of buying a house:

  • How Much House Can I Afford?
  • How Long Does It Take to Buy a House?
  • Buying a House for the First Time? Avoid these Mistakes
  • 5 Signs You’re Not Ready to Buy a House

Work with the Right Financial Advisor

You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). So, find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

The post How Much Money Do You Need to Buy a House? appeared first on GrowthRapidly.

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GSCU Mortgage Rates Reviews: Today’s Best Analysis

Granite State Credit Union (GSCU) provides members with a variety of mortgage products across the state of New Hampshire.

GSCU AT A GLANCE

Year Founded 1945
Coverage Area New Hampshire 
HQ Address 1415 Elm Street, Manchester, New Hampshire 03101
Phone Number 1-800-645-4728

 

GSCU COMPANY INFORMATION

  • Services the state of New Hampshire
  • Offers conventional loans, such as fixed- and adjustable-rate mortgages
  • Provides FHA and VA loans to qualifying individuals
  • Allows first-time homebuyers to make down payments of zero to three percent
  • Member of the NHCUL and CUNA
  • Allows borrowers to use gifted funds for the down payment and closing costs on certain loan products

Granite State Credit Union provides a variety of mortgage products to individuals across the state of New Hampshire. It offers traditional loans, such as fixed- and adjustable-rate mortgages, as well as government-assisted loans and options for individuals who cannot put 20 percent down on a new home.

GSCU Mortgage Facts

  • Services the state of New Hampshire
  • Offers conventional loans, such as fixed- and adjustable-rate mortgages
  • Provides FHA and VA loans to qualifying individuals
  • Allows first-time homebuyers to make down payments of zero to three percent
  • Member of the NHCUL and CUNA
  • Allows borrowers to use gifted funds for the down payment and closing costs on certain loan products

Overall

gscu mortgage rates reviewGranite State Credit Union provides a variety of mortgage products to individuals across the state of New Hampshire. It offers traditional loans, such as fixed- and adjustable-rate mortgages, as well as government-assisted loans and options for individuals who cannot put 20 percent down on a new home.

Current GSCU Mortgage Rates

GSCU Mortgage Products

Granite State Credit Union provides a variety of home mortgage products. Its offerings consist of traditional mortgages and government-assisted loans, as well as programs for first-time home-buyers and affordable home refinances.

Fixed-Rate Loans

Fixed-rate loans are the best choice for homebuyers who plan on staying in their home for an extended period. With fixed-rate loans, buyers can expect their principal and interest rates to remain the same throughout the loan’s lifetime. GSCU offers fixed-rate mortgages for lengths of 10, 15, 20, and 30 years.

Adjustable-Rate Loans

An adjustable-rate mortgage (ARM) provides borrowers with an interest rate that may vary throughout the loan term. Typically, these mortgages have a lower initial rate than fixed-rate loans, giving potential customers more financial freedom when looking for a new home.

After the initial period, the rates and payments associated with these mortgages may rise or fall to adjust to market prices. Typically, these costs will fluctuate on an annual basis.

Many companies, including GSCU, provide a cap that prevents these costs from getting too high from one year to the next. GSCU recommends these types of mortgages for home-buyers who do not plan on staying in the house for the loan’s full term. GSCU offers 1/1, 3/1, 5/1, and 7/1 ARMs.

First-Time Homebuyer Loans

GSCU offers excellent deals on mortgages for first-time buyers. The credit union gives borrowers the flexibility to choose a fixed- or adjustable-rate mortgage and even provides no and low down payment options to first-time buyers. The No Down Payment mortgage allows borrowers to take out a 5/1 ARM and pay zero percent down on the home.

The Low Down Payment Adjustable loan offers a 3 percent down payment with a 3/3 ARM and the option to refinance into a fixed mortgage if so desired. The Low Down Payment Fixed loan offers a 3 percent down payment and a 30-year fixed-rate mortgage. For Low Down Payment Adjustable and Fixed mortgages, borrowers can use gifted funds for the down payments and closing costs on their homes.

FHA Loans

Unlike some other credit unions, GSCU offers FHA loans to home-buyers who do not qualify for other loan programs. Borrowers may have a high debt-to-income ratio, low credit score, or the inability to put 20 percent down on the home. The Federal Housing Administration (FHA) created these types of home loans to grant buyers the opportunity to invest in property. GSCU allows 100 percent of the closing costs to be gifted.

VA Loans

GSCU allows veterans, military members, and their spouses to apply for VA loans. These types of mortgages are backed by the U.S. Department of Veterans Affairs (VA). Qualified individuals can make a low down payment on the home and keep up with affordable monthly payments.

HARP Loans

The Federal Housing Finance Agency (FHFA) introduced the Home Affordable Refinance Program (HARP) as part of their Making Home Affordable™ initiative. HARP allows eligible homeowners to refinance their mortgages into a lower interest rate to keep their finances secure. HARP provides this opportunity for individuals who otherwise may not qualify for refinancing due to their declining home value.

GSCU Mortgage Customer Experience

Granite State Credit Union offers a variety of online resources that help current and prospective borrowers research home loan options. GSCU’s website contains several mortgage calculators, which assist home-buyers in determining how much they can take out on a home loan.

It also provides information about their different mortgage products, which helps borrowers figure out what type of home loan is right for them. GSCU has a Refer-a-Loan option, which incentivizes borrowers who refer a New Hampshire resident or business owner to procure a loan with the credit union.

In exchange for this referral, both parties can receive $25 for consumer loans or $50 for the mortgage and home equity loans.

GSCU Lender Reputation

Founded in 1945, Granite State Credit Union has provided affordable mortgage rates to New Hampshire residents for over 70 years. Its Nationwide Mortgage Licensing System ID number is 477276.

Since the credit union only services the states of New Hampshire, it does not have many online customer reviews. It is not accredited by the Better Business Bureau, and has no reviews on the site, but maintains an A+ rating.

GSCU Mortgage Qualifications

Although GSCU has flexible mortgage qualifications for individuals taking out FHA loans, its qualification requirements for individuals requesting other home loans are similar to mortgage industry standards.

First and foremost, the credit union prioritizes credit score when approving someone for a loan or for calculating their rates. FICO reports that the industry-standard credit score is 740. However, those with credit scores above 760 can expect the best mortgage rates.

Credit score Quality Ease of approval
760+ Excellent Easy
700-759 Good Somewhat easy
621-699 Fair Moderate
620 and below Poor Somewhat difficult
No credit score n/a Difficult

Buyers should typically expect to put 20 percent down on the home, unless they qualify for a government-assisted loan. In some cases, buyers can anticipate paying as little as zero to three percent on their mortgage down payment.

With certain types of loans, such as first-time home-buyer, FHA, and VA loans, GSCU allows borrowers to use gifted funds to make down payments and pay closing costs. However, those taking out a traditional fixed- or adjustable-rate mortgage should anticipate paying these costs on their own.

History of GSCU

Granite State Credit Union (GSCU) was founded in 1945 in Manchester, New Hampshire. Founder John Edward Grace, who previously worked as a city bus driver, put down an initial deposit of $15.

With the work put forth by John and his wife, Betty, GSCU achieved notability and success before merging, in late 2003, with the Acorn Credit Union. GSCU is currently a member of the New Hampshire Credit Union League (NHCUL) and Credit Union National Association (CUNA). It offers a selection of home loan products, including fixed- and adjustable-rate, VA, FHA, HARP, and first-time home-buyer loans.

Bottom Line

If you live in New Hampshire, GSCU may be a great fit for you! With a variety of mortgage products, GSCU has something to offer for everyone. For more information, visit their website. 

The post GSCU Mortgage Rates Reviews: Today’s Best Analysis appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

3 Strategies for Homebuyers to Reduce Expenses and Build Wealth

This story originally appeared on The Penny Hoarder. Buying a home is a visceral experience. Every house you walk into or click through online brings visions: future meals cooked in the kitchen, friends in the living room, kids playing in the backyard. These feelings are so strong that they can easily cloud your judgment when it’s time to put in an offer. So how should you view your first home…

Source: moneytalksnews.com