My Real Estate | A Quick Q&A

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Here is some Q&A between Amy and Cyndi Garza, with Union Home Mortgage.

-How much cash do you actually need on hand to purchase a home? (Inspections, closing costs, etc.)-The amount can really vary.  It is very difficult to say a certain dollar amount.  We have all heard of the “zero down” payment, however, there are still closing costs and escrows that need to be accounted for.  I would recommend reaching out to a lender and getting a breakdown of these fees in the price range you are looking to purchase in.

-Is it true first-time buyers don’t need a down payment? Not always but kind of goes along with the above.  Although they may not need a down payment and even if seller is paying some of the closing costs for them there are fees they need up front such as appraisal money, inspection money, sometimes they have to pay for their homeowners insurance before closing.  Also the house may have some small repairs that they may negotiate and pay for.

-What is PMI and does it ever end?  PMI was  a brand name for mortgage insurance (no longer in business).  There are several different companies who offer mortgage insurance and the length of the time depends on the contract of the mortgage insurance company.  However most will not require after three years and you can show you have over 20% equity in the property.

-Will paying property taxes up front at closing mean lower monthly payments during the year? No typically you need to set up an escrow account up front to cover your tax bill and also collect monthly.  An example is if your taxes are due in July you close in May-you will have only made one payment and your summer tax bill will be due so you need to set that up at the beginning so you have enough to pay your tax bill.  Also there are programs where if you have a 20% down payment it is not required to have it in your payment.

-Any advice you have for home buyers?  Yes, please meet with a lender you trust to answer your questions and walk you through every step of the way.  This is a large investment and you want to be sure you understand it fully.  They can give you a break down to show what is in your monthly payment, how much you will need for closing, how to improve your credit, they can also cover budget with you to be sure you are qualifying for the home that is comfortable for you.http://www.sweetteamhomes.com/

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