Beginning the Home Buying Process
Apply for Pre-Approval
Scoring pre-approval will assist with revealing potential debts, identifying what you can afford, and calculating sample mortgage payments.
Once you are granted pre-approval, you will have a better understanding of the loan process and all parties involved in the transaction will see that you are qualified and serious to purchase.
You Don't Need 20% Down to Buy
A conventional mortgage isn’t insured by the federal government and likely has a fixed or adjustable rate. It will also require that you have a 20% down payment when you purchase your home. This doesn’t seem like a lot but, according to Zillow, the median price of a home in Chicago is $223,400….a number that has gone up 7.9% since 2016. According to the 20% down rule of thumb, you would need at least $46,680 in order to buy a standard home in our great city.
Factors such as your credit score, the size of your down payment, and existing debt impact whether or not a lender is willing to offer you a mortgage with as little as 5% down. If you qualify for a FHA loan–a mortgage issued by the Federal Housing Administration, this number drops to 3.5%.
Regardless of how much or little you put down, you have to be honest about your overall budget from the start.