How much do you need to put down when buying a home? Do current market conditions change anything? Even these most basic questions can be a challenge to navigate in the home buying process.
Whether you’re thinking of buying soon or planning ahead, let’s clear up any uncertainties and come up with the right strategy for your household. Take a look at these frequently asked questions:
How much should my down payment be?
The minimum down payment depends on what type of mortgage loan you’re getting. Some loans require 3% to 3.5%, while others (VA and USDA loans) require zero down. Your credit score will also play a role in some cases.
Is a large down payment always better?
It depends on your budget and long term goals. A big down payment will mean smaller monthly payments and less interest in the long run; however, if it depletes your emergency savings or puts you in dire financial straits, it’s best to keep your savings untouched.
What things should you consider when setting your purchase price amount?
You’ll want to look at the price range you’re shopping in, your budget, the payment you feel comfortable making, and the types of loans you’re eligible for. Talking to a reputable loan officer can help you get an accurate idea of what to expect based on your income, debts, savings and credit.
Do you have to come up with all of it on your own?
There are many down payment assistance programs through the City of Louisville and loan programs. Additionally, many lenders allow “gifted” funds towards down payments, which is money given to you by family or others. Before you can use the funds, you’ll need a letter stating that the funds are a gift to you and not a loan.
Do you have more questions? Get in touch with Twin Spires Realty today at 502-742-7311!
