Enough Down payment? How much money does it take to buy a house? The answer is partly in the type of loan you use. A first-time homebuyer can use the VHDA loan program and get into a house for as little as 1% down. A veteran can use a VA loan and get in with nothing down. Buyers using an FHA loan can get in with a 3% downpayment plus closing costs. Contracts can usually be negotiated having a seller pay some or all of the closing costs. Conventional loans typically require a 5% down payment plus closing costs.

The important thing to remember is that there are more loan programs today than ever before and a future homebuyer needs to sit down with a real estate agent and mortgage lender to help chart the best possible course. It is never too early to contact a real estate agent. The advice they give you will help you make the right home buying decision, so take advantage of their knowledge.

Glossary of Terms -

Discount Points - "pre-paid interest". A discount point equals 1% of your loan amount and serves to buy a borrower a lower interest rate. If you plan on being in a home beyond 5-7 years, a discount point may be for you. If you move before then, you might not have recouped the money spent on the discount point from the savings of the lower monthly payment.

Pre-paids - When you purchase a home, you must build up your escrow account. Your escrow account is paid into monthly and your property taxes and insurance are paid from it. When you settle on your home you usually pay into your escrow account three months of property taxes and 13 months of homeowners insurance. These monies are considered your pre-paid items.

Closing Costs - While most people use this as a generic term, technically these are your fees for a survey, title insurance, attorney fees, as well as other settlement fees. It is common to refer to discount points and pre-paids as closing costs, but technically this is not correct.