Your Palm Beach County Real Estate Market News by Lilianna Gizynski
The traditional 20% down payment is still the best option because it lets you skip private mortgage insurance. But if 20% down is not possible, there are programs that can get you into a house with a much smaller sum. For example, FHA programs let you get a mortgage with as little as 3-1/2% down if your credit score is at least 580.
The first step is on deciding how much you have saved for down payment then how much you possibly can spend for on a house.
Lenders will give you a loan which must be limited to a specific amount so that your monthly housing payments (including property taxes and insurance) will not exceed 28% of your pre-tax monthly income.
But if your income is not stable, if your pay fluctuates seasonally or you work in an industry with high turnover – you should consider a lower percentage, perhaps 20% or so, just to make sure you will have enough for additional expenses beyond that monthly housing payment like repairs, additional utility bills, homeowner’s association fees, and so on.