Real Estate Article:  Mortgage Overview

If you are like most buyers who are buying a home with a loan, you are wondering how much money you are going to need to buy a home and what the interest rate will be.  Although it will take a lender to tell you exactly how much you will need in down payment and closing costs, this will give you an overview about them.

The amount of down payment you will need and what interest rate you receive depends on your credit.  If you have great credit, you can get a loan with no down payment.  You might even be able to qualify for a loan that wraps your closing cost into the loan!  But Mortgage Brokers have ways to get buyers who do not have "squeaky clean" credit into homes without much cash out of their pockets.  Those loans do need some help for sellers, so it will take the right home and right seller.

An FHA loan only requires 3% down.  You can also get conventional loans for only 5% down with fairly good credit.  If you have “less than perfect” credit, you may have to put 10% or 20% down.

When you write a contract, you will need to write a check for “earnest money” to show the seller you are serious.  You will usually need at least $1,00 earnest money.  Sellers of higher priced homes may require that you give a higher amount of earnest money.  The earnest money check will be deposited in the our escrow account, rather than a listing company or title company escrow account to protect you.  These escrow accounts are special non-interest bearing accounts that are regulated by the Missouri Real Estate Commission.  Your earnest money can also go into the trust account of the title company you select to work with.  At closing, we will bring a check to closing for your earnest money and the amount will be credited to your down payment and/or closing costs. 

Linda Grissette, GRI, e-PRO Certified

The Best Seller GMAC Real Estate, 3829 Veterans Memorial, St. Peters, MO 63376 

Licensed in the state of Missouri.

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