Downpayment is two fold.
1. EMD (earnest money deposit) the money you put down at the time of making the offer.
2. Downpayment is the amount you will pay out of your funds towards the purchase price, this includes the EMD funds.
-- FHA loans only require a minimum of 3.5% but you can put more down. You will have mortgage insurance to pay, and of course your payment will be higher than a conventional loan.
-- Conventional loans with downpayments of 5% and up are available.
-- Mortgage insurance is automatic on most FHA loans.
-- Down payment of 20% or more can eliminate mortgage insurance.
This is very simplified so you should find a Realtor and a lender who will sit down and fully explain the choices.
You may contact me directly and I can respond to your questions about any part of the transaction process.
If the 38k estimated are in youre Good Faith Estimate then it is including closing cost. That is good because by law the final contract have to match the Good Faith estimate.
To answer youre question on how much to put down the best advise is to only put 20% down ($27,000)
like that you wont have to pay mortgage insurance. Plus $3,800 in closing cost total of $30,800. So i dont know why youre banker is telling you $38,000. The rate depends in your credit report, it could range from 3.375%-4.50% Give me a call for a quote, is better to shop around than to only have one quote. My info is at the bottom.
Gabino Barrera Jr.
23705 Crenshaw BLVD. Suit 101
Torrance, CA 90505
License by the State of California Department of Corporations under the California Residential Mortgage Act