This is of course after about half of them told you none of your business. Generally a 30% down payment is not required. If you are in this very fortunate situation that's great, but you may find that you are better off using a smaller down payment and keeping some of that cash in savings.
A large down payment does have its advantages.
It will get you a better rate of interest, lower your closing costs and possibly get you a larger loan amount. It will also make your monthly repayments lower. Between 10 and 15 years ago, the average down payment was 20%. However, housing prices all over the country have risen. This means that the 20% down payment will rise right along with it. More and more people were finding it difficult to raise this kind of money to buy their home so lending institutions started making mortgages available for smaller down payments.
Mortgages exist for people who pay 5-20% down.
There are even places offering 100% financing for people who qualify. What are some advantages to this? Well, you can hold some money back for savings or even home improvements. You can also start building equity in your home right away instead of having to wait until you save that huge down payment during which time housing prices should rise. Remember, the interest on your mortgage is a tax deduction as well.
Down payments under 20% might mean PMI payments.
You do need to be aware that if you make a down payment of less than 20%, many lending institutions will want to charge PMI insurance. This stands for private mortgage insurance. Banks consider you a higher risk if you make a lower down payment so they impose this charge to protect themselves. It stays on your mortgage until you reach between 20-22% equity in your home. You may have the option of taking on a higher interest rate or a second mortgage for 20% of the amount. This may work out better for you because all of the interest is a tax deduction whereas PMI is not.
Get a down payment - any is better than none!
You do not need 30% down to buy a property. There are many options available for less. A large down payment does have its advantages but there may be better uses for that money. Think carefully and do your homework, and when you are ready, compare mortgage loan lenders to find the best rate with the down payment you can come up with.
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This is of course after about half of them told you none of your business. Generally a 30% down payment is not required. If you are in this very fortunate situation that's great, but you may find that you are better off using a smaller down payment and keeping some of that cash in savings.
A large down payment does have its advantages.
It will get you a better rate of interest, lower your closing costs and possibly get you a larger loan amount. It will also make your monthly repayments lower. Between 10 and 15 years ago, the average down payment was 20%. However, housing prices all over the country have risen. This means that the 20% down payment will rise right along with it. More and more people were finding it difficult to raise this kind of money to buy their home so lending institutions started making mortgages available for smaller down payments.
Mortgages exist for people who pay 5-20% down.
There are even places offering 100% financing for people who qualify. What are some advantages to this? Well, you can hold some money back for savings or even home improvements. You can also start building equity in your home right away instead of having to wait until you save that huge down payment during which time housing prices should rise. Remember, the interest on your mortgage is a tax deduction as well.
Down payments under 20% might mean PMI payments.
You do need to be aware that if you make a down payment of less than 20%, many lending institutions will want to charge PMI insurance. This stands for private mortgage insurance. Banks consider you a higher risk if you make a lower down payment so they impose this charge to protect themselves. It stays on your mortgage until you reach between 20-22% equity in your home. You may have the option of taking on a higher interest rate or a second mortgage for 20% of the amount. This may work out better for you because all of the interest is a tax deduction whereas PMI is not.
Get a down payment - any is better than none!
You do not need 30% down to buy a property. There are many options available for less. A large down payment does have its advantages but there may be better uses for that money. Think carefully and do your homework, and when you are ready, compare mortgage loan lenders to find the best rate with the down payment you can come up with.