Refinance Mortgage Tips Your Down Payment Is Key

Refinance Mortgage Tips Your Down Payment Is Key



Refinance & Mortgage Tips: Your Down Payment is​ Key
If you​ are buying a​ house,​ the​ first thing you​ need to​ figure out is​ how much of​ a​ down payment you​ can afford to​ make .​
This may seem like the​ sort of​ advice your father would give you,​ but rest assured there are a​ few reasons why knowing what you​ can put down and where you’ll get the​ money can make all the​ difference when shopping for a​ house and a​ mortgage to​ finance your new purchase .​
Before you​ pick up your local newspaper and browse the​ real estate section looking for a​ new house,​ call up your banker,​ your accountant,​ or​ your spouse and find out how much you’ve got in​ savings and liquid assets to​ make the​ down payment and pay the​ closing costs on​ your mortgage.
First you​ must consider the​ source of​ your down payment,​ because this affects how much of​ the​ down payment your lender will actually attribute to​ you​ the​ applicant for the​ purpose of​ qualifying you​ for loan programs and determining your rates and payments .​
If the​ money is​ from your savings and securities / investment portfolio,​ be sure you​ can prove it .​
If you​ have employer retirement tax deferred accounts,​ 401(K) 403(b) accounts etc .​
and would like to​ use those as​ a​ source to​ finance the​ down payment,​ the​ lender will likely have several special conditions and limitations on​ the​ treatment of​ those funds .​
If you​ are receiving the​ down payment in​ part or​ in​ total as​ a​ gift,​ your lender will have another set of​ rules which will affect your payments .​
How you​ pay for closing costs will also have some affect on​ your final rates and payments; the​ more you​ take from a​ third party like the​ seller,​ the​ more risk the​ bank assumes.
A rule of​ thumb about size: the​ bigger the​ better when it​ comes to​ your mortgage down payment,​ at​ least from the​ perspective of​ programs,​ rates and payments .​
The more you​ put down out of​ your own savings,​ the​ lower your payments and the​ broader your selection of​ loan programs .​
An added benefit is​ that more money down means that any blemishes on​ your credit report or​ a​ low score count for less and less the​ more you​ pay upfront,​ and you​ also reduce your income requirement by improving your debt to​ income ratio .​
By knowing how much you​ can put down,​ you​ will know in​ advance how much house you​ can be qualified to​ purchase by your mortgage lender,​ get that mortgage pre-qualification letter,​ and know what to​ put in​ your purchase offer with your realtor,​ lawyer and seller when it’s time to​ make an​ offer .​
By finding out what you​ can afford to​ put down,​ you​ can get a​ head start on​ knowing your overall homebuying budget,​ financing options,​ and also have time to​ take care of​ the​ documentary requirements,​ seasoning and time-sensitive pre-requisites associated with closing your deal,​ saving you​ weeks if​ not months of​ wasted time sorting out these matters after you’ve found the​ house of​ your dreams.
So find out what you​ can put down and where you​ can get it​ from,​ contact a​ mortgage broker to​ find out what you​ can afford and what you​ can do with your down payment and documentation to​ get the​ best rates,​ payments and terms,​ and then take a​ pre-approval letter from the​ broker with you​ to​ start shopping for homes with a​ full knowledge of​ what you’ll be asking for and writing on​ the​ contract.




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