mortgage

6 must-do's before buying a home

Mortgage » 6 Must-Do's Before Buying A Home

Save for down payment, closing costs
Save for down payment and closing costs © kurhan/Shutterstock.com

Save for down payment, closing costs

Depending on your credit and financing, you'll typically need to save enough money for a down payment -- somewhere between 3 percent and 20 percent of the home's price.

If you're using FHA financing, then you need a credit score of 500 or higher. And in the 500 to 579 range, if you can find a lender, you'll have to put 10 percent down instead of 3.5 percent.

One exception: Veterans Affairs loans, which require no down payment.

Don't forget loan fees

Another cash expense: closing costs. Whatever your loan source, you'll also need money to pay closing costs, which run (depending on where you live ) from $2,300 to $4,000. Get the average closing costs in your state at Bankrate's closing costs map.

Improve your chances by: banking your own money and seeking down payment assistance, Tiffany says. Often it's location-based or tagged to a certain type of buyer, like first-timers, she says. Search online with the city name, then the county name, along with word combinations such as "down payment assistance," "first-time homebuyers" and "homebuyer's assistance."

In a buyer's market, you can also negotiate to have the seller pay a portion of the closing costs.

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