First-Time Home Buyers, Part VI: All About Downpayments
January 9, 2009
An important aspect of getting a home loan is saving money for your downpayment. You have many choices to make your new home more affordable to you.
Lenders used to require a down payment of at least 20 percent of the home’s purchase price. These days, however, many lenders offer flexible home loan programs allowing you to put very little down — 3 percent or less of the price. For some buyers it’s possible to buy a home with no down payment at all, or to receive help from local down payment assistance programs.
If you decide to make a down payment of less than 20 percent, your lender may require Private Mortgage Insurance (PMI), which protects the lender in case you cannot repay the mortgage. Talk with your mortgage professional to find out the smartest deal for you.
You’ll also need to pay for closing costs, which are costs associated with initiating a loan. These can include loan origination fees, discount points, attorney fees, recording fees, and pre-paids. They often will total from 3-5 percent of the home price.
Once you have your down payment and loan pre-approval, it’s simply a matter of finding the right house — which is where I come in. Please call or email when you are ready to take this next step towards owning your own home.
Erik Langerak
865.805.913
eriklangerak@yahoo.com
