Mint is one of the oldest and best-known of the many personal budgeting apps available to U.S. consumers. It has a slew of capabilities designed to increase your understanding of your personal finances, categorize your spending and saving, and become more financially fit overall. It’s free to use, though subsidized by sponsor ads and partner offers.
The steps to buying a house might seem complicated at first—particularly if you're a home buyer dipping a toe into real estate for the very first time. Between down payments, credit scores, mortgage rates (both fixed-rate and adjustable-rate), property taxes, interest rates, and closing the deal, it's easy to feel overwhelmed. There's so much at stake with a first home!
If your offer called for a home inspection, this is a big day. Sure, you get to have a home inspector look over the home to make sure there are no unseen defects you want to negotiate to have fixed. But more importantly, this is the most time you’ll get to spend in your new home until closing. Go ahead and start measuring things and figuring out what goes where. This may be the last time you are inside the home until it is yours, several weeks from now.
In the short and medium run, it’s much safer to invest in FDIC-insured instruments such as traditional savings accounts, certificates of deposits (CDs), and money market accounts. Though these instruments have relatively low yields – currently below 2% APY in most cases (UFB Direct is currently at 2.45%) – the risk of principal loss is extremely low. If you want your down payment to actually be there, in full, when you need it, save investments in FDIC-insured accounts are your ticket.
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Although 20 percent isn’t a prerequisite to homeownership, many buyers do put that amount down and then some. Larger down payents are more prevalent for buyers in the West (47 percent put down 20 percent or more) and the Northeast (52 percent put down 20 percent or more). This is because of tighter markets and the need to present a more competitive offer to a seller in order to win the home.
If you are unable to make a 20% down payment, there are many lenders that will allow you to make a smaller down payment on a house. Among them is the FHA, which offers mortgages with as little as 3.5% down, if your annual income is under a certain amount that varies by market. There are even some lenders, like the U.S. Department of Agriculture, that allow you to put 0% down, but eligible homes are usually in rural areas, and your income must meet certain low requirements.
USDA Loans. If you’re buying a home in a rural or outer suburban area, you may qualify for a USDA loan, another type of federally insured loan designed to bring housing within reach for lower-income country-dwellers. Unlike FHA and VA loans, USDA loans are direct loans – they’re made by USDA itself. Use USDA’s property eligibility map to see if you qualify.
You need to worry about common closing costs such as your home inspection, lender appraisal, and title insurance. Taken together, these expenses are nothing to sneeze at – depending on your situation, they can amount to anywhere from 3% to 6% of the total purchase price. In buyers’ markets, you might have luck convincing your seller to pay some closing costs, but that’s far from guaranteed.
Outside of these Fannie Mae, FHA, VA and USDA loan types, there are state and local assistance programs that can help you get into a home with a low-down payment. There are also towns that offer incentives to move there, ranging from student loan forgiveness to free lots of land to build on. Even though these programs don’t cover your down payment for you, they can help you save money elsewhere if you can come up with the initial down payment up front.