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Homeowner versus Renter
#1
Many renters do not realize that being a home owner is not as difficult as it sounds. Many renters feel that you need 20% down payment to become a homeowner. Renters also think that they need thousands of dollars in closing costs to be a home buyer. That is not true. FHA loan programs only require 3.5% down payment of the purchase price. Many renters already pay close to 3.5% down payment on a rental from the first months rent and security deposit. Many landlords require two months security deposit and first months rent. If you are a veteran, VA Loan programs do not require any money down and offer 100% financing. USDA Loans do not require any money down either and offer 100% down payment. As for closing costs, home buyers do not have to come up with any closing costs. Home buyers can get a sellers concession towards a home buyers closing costs credit or if the home seller will not offer a sellers concession, then they can get a lenders credit towards the home buyers closing costs. Tax proration credits from the home seller can be used to offset the down payment. The home buyer may not use the full 3.5% down payment because the seller will give the home buyer tax proration credits, however, the home buyer still needs to show that they have the 3.5% down payment.

FHA allows the home seller to give the home buyer up to 6% in sellers concessions toward the home buyers closing costs. VA Loans permits up to 4% sellers concessions towards a home buyers closing costs. USDA Loans allow up to 6% sellers concessions towards a home buyers closing costs. Investment properties allow a maximum of 2% sellers concession towards a home buyers closing costs. Any excess in sellers concessions needs to go back to the seller. It is wise not to ask excess in sellers concession.

 
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#2
Here is another interesting article on renting versus buying

http://gustancho.com/renting-a-home-vers...ng-a-home/

 
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#3
(09-19-2014, 10:52 PM)Gustan Cho Wrote: Many renters do not realize that being a home owner is not as difficult as it sounds. Many renters feel that you need 20% down payment to become a homeowner. Renters also think that they need thousands of dollars in closing costs to be a home buyer. That is not true. FHA loan programs only require 3.5% down payment of the purchase price. Many renters already pay close to 3.5% down payment on a rental from the first months rent and security deposit. Many landlords require two months security deposit and first months rent. If you are a veteran, VA Loan programs do not require any money down and offer 100% financing. USDA Loans do not require any money down either and offer 100% down payment. As for closing costs, home buyers do not have to come up with any closing costs. Home buyers can get a sellers concession towards a home buyers closing costs credit or if the home seller will not offer a sellers concession, then they can get a lenders credit towards the home buyers closing costs. Tax proration credits from the home seller can be used to offset the down payment. The home buyer may not use the full 3.5% down payment because the seller will give the home buyer tax proration credits, however, the home buyer still needs to show that they have the 3.5% down payment.

FHA allows the home seller to give the home buyer up to 6% in sellers concessions toward the home buyers closing costs. VA Loans permits up to 4% sellers concessions towards a home buyers closing costs. USDA Loans allow up to 6% sellers concessions towards a home buyers closing costs. Investment properties allow a maximum of 2% sellers concession towards a home buyers closing costs. Any excess in sellers concessions needs to go back to the seller. It is wise not to ask excess in sellers concession.

Here is an article about first time home buyers.

http://gustancho.com/preparing-mortgage-...me-buyers/

 
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