Who Qualifies for Low Down Loan

• sufficient income to support the monthly mortgage payment
• enough cash to cover the down payment
• sufficient cash to cover normal closing costs and related
• expenses (explained below)
• a good credit background that indicates your payment history or "willingness to pay"
• sufficient appraisal value, which shows the house is at least equal to the purchase price and, in some cases
• a cash reserve equivalent to two monthly mortgage payments

Closing costs, or settlement costs, are paid when the home buyer and the seller meet to exchange the necessary papers for the house to be legally transferred. On the average, closing costs run approximately 2% to 3% of the house price. This percentage may vary, depending on where you live.

Closing costs include the loan origination fee (if not already paid), points, prepaid homeowner's insurance, appraisal fee, lawyer's fee, recording fee, title search and insurance, tax adjustments, agent commissions, mortgage insurance (if you are putting less than 20% down) and other expenses. Your lender will give you a more exact estimate of your closing costs.

Points are finance charges that are calculated by the lender at closing. Each point equals 1% of the loan amount. For example, 2 points on a $100,000 loan equals $2,000. Lenders may charge 1, 2 or 3 points in up-front costs in addition to the down payment. The more points you pay, the lower your interest rate will be. In some cases, you may be able to finance the points.

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