This is probably the number one question I get asked and the number one factor that keeps people from trying to buy a house. So, I’m going to try to answer this for you in the simplest, but broadest way to give full insight on multiple scenarios.
It can be as low as $0, as we all know from the zero down advertisements. But how often does that really apply? That solely depends on credit score, income, debt to income ratios and some restrictions on location. To qualify for zero down, you need to have at LEAST a 620 score (but it’s much better to be above a 640 in this case) and can’t make over roughly $86k in Tarrant and Dallas county. (Requirements change regularly, so this was accurate as of 2018).
Don’t qualify for zero down? There’s another option; FHA loan. That’s 3.5% down of the purchase price of the house and a minimum credit score of 580. So for example if you are buying a $200k house, downpayment needed is $7k. A $250k house, downpayment would be $8750. There are other loan types that require a bit higher down payments but have less fees in the long run, making it a financially smarter investment.
But there’s also closing costs to consider in addition to the downpayment. They range up or down depending on the transaction. Typically it includes home owners insurance, mortgage insurance, appraisal fees, survey, taxes. But those vary depending on the contract your agent negotiates for you.
The good thing? You can get your closing costs paid by the seller! Now, that’s where a good agent comes in. They can research the property and market and guide you on what potential options there are on getting closing costs covered…even in this sellers market!
So, to answer this question, it varies depending on the contents of offer, the price of the house, and the type of loan you can get. But don’t ever let that discourage you from reaching out to see what your circumstance can be. Agents and lenders have lots of tricks up their sleeves to help their clients out, so just be forthcoming with as much information as possible and you might be surprised with what can become your reality.
Contact us to see how you can qualify for a home loan and explore $0 down options like USDA, VA, Public Servant Programs and more!