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2009-12-16 17:45:47
Financing is available!

Yes, you can still buy a home!

With all the press of late you'd think it would be next to impossible to purchase a home! While it's true that the days of drive up financing are long gone, it's still quite easy to get a home financed assuming you meet the requirements for an FHA loan.

Here are the basic requirements:

1) You will need cash for a down payment. The minimum amount is 3.5%. So let's say you want to buy a home priced at $200,000. You'll need $7,000 down. This money can come from a relative but you can't simply take a cash advance on your credit card because that would show up on your credit report.

2) Closing costs can be paid for by the seller on your behalf, up to 6% of the price of the home. This is huge! It means that the only money you'll need is the 3.5% down payment!

3) All your monthly debt payments (mortgage, car payment, credit cards, student loans, etc) added up can not be more the 41% of your combined gross monthly income. For example, if you and your spouse make $5,000 per month combined gross income and your only debt payments are $500 for the car and $250 for credit cards you'd have $1,300 left over for your home payment each month.

$5000 X .41 $2,050
Car Payment $500
Credit Cards $250
Left Over $1,300


4) Your credit score must be above 620. Don't rely on those online credit reports, the scores are not the same as your loan officer will see.

5) The price of the home you're purchasing must be below the FHA maximums for your county.

Salt Lake $729,750
Summit $729,750
Davis $397,500
Weber $397,500
Utah $323,750
Wasatch $431,250


So as you can see, the hurdle is set pretty low at 3.5% for a down payment. Once upon a time you needed 20% to buy a home. So things aren't as bad as they may seem.

 
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