MUD Taxes: Understanding the Charges (and benefits!) When Buying in a MUD
Posted by Kim Craigmyle in Houston, Home Buying
Purchasing a home is one of the most thrilling experiences, but it also means understanding a lot of new terminology, filling out a loan application, budgeting for the various costs involved, and understanding how to take care of a home!
As you navigate the steps to buy a new home, here are answers to some frequently asked questions about how to save up for a down payment.
How much do you need for a house down payment?
The average down payment on a house depends on the kind of loan—conventional, FHA, VA—as well as your debt-to-income ratio and your credit score.
- FHA can be 3.5-5%.
- Conventional does not have to be 20%, contrary to popular opinion. We can get as low as 3% with Home Possible and Home Ready, which are Freddie Mac- and Fannie Mae-friendly programs with M/I Financial (MIF).
- VA can be as little as 0% down.
- Texas Vet Land Board Program* – special Texas loan option available for veterans.
What are easy ways to start saving up for a down payment?
Only spend if you have an emergency—going shopping or out to eat is not an emergency! You should try to only spend on absolutely necessary things, like new tires for a car.
If you really want to buy a house and save money, you have to cut out the frivolous, extra things temporarily.
How much time should you allow to save for a down payment?
How much are you going to put down? And how much can you save per month?
Some buyers temporarily get a second job and/or work overtime and put all of their extra income into a new account, or after paying off a credit card they allocate that monthly payment to their down payment.
Do you want to keep your cash or have a lower loan amount? It’s up to you and what you can qualify for.
What other house expenses should you expect from a new construction home?
Third-party inspections are a consideration, but other than that because it’s new, you’ll just need to consider your monthly bills and what you want to fill your home with.
What options are available for financing?
The types of loans we have available are Conventional, FHA, VA, USDA, Texas Vet,* DPA, TSAHC,* and Grant or Bond depending on what best fits your unique situation.
What else do you need to know about budgeting for a new home?
First, most people think if you pay off all your credit cards and don’t have a lot of debt your credit scores will go up, but this isn’t true. You have to have some kind of recurring debt to pay off in order to keep your score moving in the right direction.
Next, always make sure you get pre-qualified prior to signing your contract! You’ll definitely want to go through a financial expert to inform your approach to buying a home and save yourself from any disappointment.
Last but not least, at the time of signing your contract, you will need to have earnest money prepared—budget for about 2% depending on your sales price. You are credited this back at closing, and it goes towards your down payment.
We’re so excited for you to begin your journey to homeownership! Our M/I Financial team is here to help with any additional questions you might have about rates, loan qualification, and more. Reach out to us today.
*This type of home loan is available only in Texas. Contact MIF for more details about loan options for you.
Author
Kim Craigmyle
Author
Kim Craigmyle is our VP/Branch Manager of M/I Financial in Houston, Texas. Kim brings 25+ years of financial expertise to conversations to help buyers finance their new home, and she started M/I Homes’ Welcome Home Club in 2019. She’s an avid softball player, and she loves spending time with kids and 6 grandkids.
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Author
Kim Craigmyle
Author
Kim Craigmyle is our VP/Branch Manager of M/I Financial in Houston, Texas. Kim brings 25+ years of financial expertise to conversations to help buyers finance their new home, and she started M/I Homes’ Welcome Home Club in 2019. She’s an avid softball player, and she loves spending time with kids and 6 grandkids.