The amount of money a person is able to save often has an impact on the loan they are offered. If you are planning on buying a home in the future, here is what you need to know about the funds needed to do so.
In the Short Term
When you are attempting to qualify for a loan, lenders will take a close look at your pretax income. You can do the same. Look at your gross income and try to stash away about 20 percent of that in one year. For example, if you make $50,000 a year, make a goal to save $10,000 by the end of 12 months. This is the minimum. If you can save more, it will benefit you when shopping for a mortgage loan.
In the Long Term
If you plan on buying a home in the future but are looking beyond a year's time, try to put away about 10 percent of your income each year into a home savings fund. Using the same numbers, if you make $50,000 a year, that would be $5,000 put into savings by the end of 12 months.
Down Payment Requirements
Different loans have different down payment requirements. Knowing these can help you determine what you will actually need to purchase a home. If you go with conventional financing, you will need a minimum down payment of 5 percent. FHA requires a down payment of 3.5 percent, and Home Path Financing will ask for 3 percent down. Of course, these figures may fluctuate based on the market and your own credit history.
The money you should save will be dependent upon the type of house you are planning on buying. If you are interested in homes for sale in Griffin, an experienced real estate agent in our office can assist you in determining how much you will need to save and the best loan product for you. Call our team today.