Based on the current interest rates at the time this was written, homebuyers in the Dallas, TX area are able to purchase a new home for less per month than EVER before!! Current FHA and VA 30 year Fixed interest rates are available as low as 3.25%. This would put a 200k loan amount payment at only $870 per month including principal and interest – when you include the taxes, insurance, and FHA mortgage insurance, you’re total payment would be only $1646 per month (see the estimated breakdown below). To put this into perspective, this is $330 less per month than someone financing the same amount just a few short years ago at 6 percent. In this scenario, this homebuyer is able to purchase $55,000 more in home for the same principal and interest payment.
Example of Transaction Summary
Purchase Price of $204000
- 3.5% Down Payment – approx$7140 (FHA Requires 3.5% minimum down payment – VA loans have a ZERO Down Payment Option for eligible Veterans)
- Adding Back in the Up Front Mortgage Insurance Fee FHA Charges of 1.75%
Total Loan Amount of $200,000
- Principal and Interest Payment $870 per month based on current interest rates at 3.25% (rates and pricing vary from lender to lender) – Get a Quote Today from a Dallas FHA and VA Lender with the Lowest Rates and Fees in Town
- Monthly FHA Mortgage Insurance $208 per month (required on all FHA loans – based on 1.25% factor)
- Estimated Property Taxes $468 per month (based on 5616 per year)
- Estimated Home Owners Insurance $100 per month (based on 1200 per year)
Total Monthly Payment $1646
So, this all sounds good, but how much does this cost? Each program has different down payment requirements. The most common mortgage programs such as FHA has a minimum of 3.5% down, while Conventional mortgage programs require 3%-5% down. Some mortgage programs such as VA (mortgages for Veterans) and USDA mortgages allow for ZERO down payment – 100% financing.
Closing Costs will vary from lender to lender. The average lender origination fees in Texas in 2011 were over $1900 – not including title, recording, other 3rd party items and prepaid items such as first years insurance premium and escrow account setup. HOWEVER, some Dallas lenders do have much lower fees – Click Here to See an Example of Low Fees and Breakdown on a new home purchase Transaction.
You’ll want to plan on having another 5-6k to cover the closing costs and prepaid items required to close on a new home. You can negotiate that the seller contribute part of all of this amount at closing. FHA will allow up to 6% of the sales price towards closing costs – VA will allow up to 4% – Conventional will allow up to 3% (unless you’re putting down more).
Also, some lenders rates are so LOW that they also give you a “lender credit” to cover costs to close on the home. For example, this example based on current market rates at 3.25% would have a lender credit of over $1700. That is more than enough to cover all the lender fees and some of the title and third party fees.
If you’re in the Dallas area, the time to purchase a new home has never been more optimal!! You can purchase a home with a lower monthly payment and interest rate than ever before. With 30 year fixed rates at 3.25% currently, you can’t rent a home for less per month. Down payment and closing costs will vary from one program and lender to the next, but there are local Dallas lenders with exceptionally low lender and origination fees. Contact us today with questions about buying a home in the Dallas area by completing the short form below.