Going With Lower Down Payment On Your Home Loans
When it comes to home buying, down payments will often be the first thing one will go through. A down payment in the simplest of terms is basically how much cash you’re going to fork over directly to the seller. The usual rate for down payments is about 20%, allowing you to get benefits such as a better mortgage interest rate, lower upfront fees, more equity, and even lower ongoing fees. But what if you wanted to pay lower than 20%? What if you were thinking of going for a lower down payment? In this blog entry, we’ll be looking at how lower down payments could help get you in your house faster and save you some money on the side.
Less Stress on Your Savings
If you decided on paying the usual 20% down payment often recommended, budgeting is highly recommended to avoid draining your savings account. Say you have $28K in your savings and use it to pay for a home of $140K; while you’ll meet the down payment, you’ll use up all your savings in the process. Try going for a lower pay rate, like $10K. You’ll be able to pay for other costs like closing and other fees, all while keeping your savings healthy.
Getting in the Market
Saving up money for a home can take years upon years of careful saving, especially for that 20% down payment. By putting a smaller down payment on first, you’ll be able to get into the housing market rather sooner, which is great for first time home buyers! There are many first-time home buyer programs available that will let you put down as little as 3%, or even none! Make sure to do proper research and see which plan can work for your budget.
In conclusion, these lower rate down payments can help you in the long run when it comes to home buying. Always make sure to discuss these down payments with your lender, as what worked for one homeowner may not exactly work for you. We hope that this blog entry helped in terms of educating you further about the world of mortgages and loans. Until next time and from all of us Mortgage Done Right, have a lovely day