Pro’s and Con’s of FHA Loans
Posted by John Crisafulli on
Many buyers think that an FHA loan should only be used as a last resort. Indeed, more often than not conventional loans are the way to go over FHA (which stands for Federal Housing Administration) loans. However, if you’re only able to put 3% or 3.5% cash down on a property, an FHA loan could make more sense for you. Home prices in the DC area have skyrocketed in the last few years, and with that comes more difficulty on the part of buyers to put a greater percentage down on a property. What exactly are the pro’s and con’s of FHA loans? Well, that’s exactly what we’re here to tell you:
Pro’s:
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The buyer only has to put down 3.5% of the total sales price on a property.
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100% of the down payment can be a gift from a family member, friend,…
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Earnest money deposits (EMD’s) are an often-discussed and misunderstood part of real estate transactions. Also known as an escrow deposit, an earnest money deposit shows a buyer’s interest in a property when they make an offer. The potential buyer will write a check either to their real estate agent’s brokerage or to a title company of their choice. The amount of the earnest money deposit is up to the buyer, but it is usually 2.5%-3% of the purchase price. For example, Capital Park Realty recently closed on two properties: one with a purchase price of $585,000 and one with a price of $365,000. For both, the earnest money deposit was $20,000, or 3.4% for the $585,000 property and 5.5% for the $365,000 property. As you can see, it is not uncommon for the…
Are you worried about the cost of a down payment on buying a property in Washington, DC? Well, there is a new initiative called the DC Open Doors Program that could be a huge help. It is open to anyone with a total income of less than $123,295, and all District neighborhoods are in play. DC realizes that the housing market has skyrocketed and the cost of making a down payment has become out of reach for many of those with a decent income. While DC Open Doors can help lower income buyers, it is just as geared towards helping middle income buyers with their down payments for FHA (Federal Housing Administration) loans. In addition to the salary cap, you must also have a credit score of 640 or above and not currently own a property, although it is not just…