Yes, a percentage of the sales price is used to determine the down payment. The down payment could range from 3.5% up to 20%-etc (there may be no down payment required if that loan program does exist) depending on which type of loan you take out like Conventional, FHA, VA, etc.
There just may be a deal for you also since you are a first time home buyer.
But first, here is what I would do. Purchasing a home is a little different than buying a car. When you go to buy a car, you go to the lot, pick one out and then find a banker to finance it. The process of buying a home is just a little different. Talk with a banker and/or mortgage company first and find out what you qualify for. After you know what you can spend, go hire a REALTORÂ® (who won't charge you any fees) and find that perfect home.
Maybe your first home will not be your dream home. So what! Live in it for a couple of years, build some equity (and your credit) in it and then sell or lease it. Then go invest into the home of your dreams.
What other questions do you have that I can answer?
At your service!
First off congratulations on making the first step towards home ownership, deciding where to live. If have already chosen Round Rock, I believe you are ahead of the curve on this one. You would be hard pressed to find a finer community anywhere in America.
Second, expect to bring at least 8% of the sales price to walk away with a house these days. Yes it is true you can play and tweak the numbers when you narrow your search, but it is what it is. No matter how you go, you will be asked to pay down payment, lender fees such as mortgage insurance, appraisal, loan origination, processing, survey, etc., title fees and prepaids for taxes and insurance. A vet status, good credit score higher than 620, and more down payment money will help lower the risk and fees. The good news is that often times I can help my buyers by negotiating the seller to pay some of these costs.
You can generally expect to have a principal, interest, taxes, and insurance (PITI) payment of roughly 1% of the loan amount.
These are rough numbers, but should give you an good ball park of what to expectin the early going of a home search.
The best thing to do is contact a REALTOR, Mortgage Broker or Banker of your choosing to get pre-qualified (or better yet, Pre-approved). You will receive a GOOD FAITH ESTIMATE showing you: 1) Maximum sales price of home you qualify for; 2) estimated monthly payments (principal, interest, tax, insurance, etc.); 3) Down Payment; 4) estimated Closing Costs; 5) interest rate; 6) APR rate.
If you have any other questions, please ask! Feel free to visit my website where you can order two books I've written (my clients get them free) that cover, in depth, this subject.
Texas Managing Broker
Buyers House Realty
"Showing You The Rebate" http://www.BuyersHouse Realty.com
There are a variety of answers. If you have good credit then you can put down less and still get a good loan. The more you put down the better rate you will get as well.
As long as you are qualified most sellers will work with you.
Just be sure to get your loan work done ahead of time.
If you are looking for an Agent and I can be of help let me know.
We have several mortgage providers that can work with you to determine the program that works best for you.
Please let us know if we can help with anything else. You can find out more about us at http://www.FreemanCentury21.com
Mike & Starr Freeman