Down payment: The amount you're going to need to save for a down payment will largely depend on your credit and financial situation. Typically, anywhere from 3 percent to 20 percent is required. If you're using FHA financing, then you need a credit score of 500 or higher. And in the 500 to 579 range, if you can find a lender, you'll have to put 10 percent down instead of 3 percent. The one exception to this general rule is with Veterans Affairs loans, which require no down payment.
Closing costs: Whatever your loan source, you'll also need money to pay closing costs, which run from $2,300 to $4,000. In a buyer's market, you can often negotiate to have the seller pay a portion of the closing costs.
You can improve your chances to secure financing by banking your own money and search out down payment assistance. Often it's location-based or tagged to a certain type of buyer, like first-timers, she says. So do an Internet search with the city name, then the county name, along with word combinations such as "down payment assistance," "first-time homebuyers" and "homebuyer's assistance."
The very first step toward figuring out where you want to settle or where you want your vacation home, is to figure out exact what you can afford. This is arguably the most important step in your planning process. Not only would affordability preclude you from purchasing that Townsend's Inlet beach front property, when you can only afford a condominium; but it would save you from the headaches from foreclosure and unforeseen expenses.
What you can afford depends on your income, credit rating, current monthly expenses, downpayment and the interest rate. It all starts with a mortgage pre-qualification. Below there is several information about the economics about home buying, as well as some calculators to give you a rough estimate as to what may be in your range.