In today´s market, in order to buy, a down payment is a necessity. For the FHA (Federal Housing Authority) the minimum for a loan is 3%. However, most marketplaces want around 5-10%, with more troubled areas looking for 10-20%.A credit score of 720+ is necessary to bring in the best deals.
myfico.com, shows what what each credit score level (620 being the lowest), would cost you for a 30 year fixed loan, at $300,000.
620-659 credit score range nets 7.495% which =$2,097 per month
660-699 6.685% $1,933
700-759 6.401% $1,877
760-780 6.179% $1,833
Documentation is also a must. You have to be able to show that the the payments to be made on your loan and any other incurred debt would not total more than 43% of your income. Preapproving is a great step here, because it shows you more quickly what you can and cannot afford, saving some valuable time and focusing your realistic aim.
Research your loan options. For a normal or common loan, the best bet is a traditional mortgage lender or bank-owned mortgage company. However, if your income to debt ratio is not the best, credit unions, smaller banks, and mortgage brokers used to the rise and fall of the market are your best bet. The differences in percentages per entity can greatly differ.
Last but not least, try to have a back up plan, so that if your number one option does not work out, you can go to your second and not have to start at zero all over again.
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