DOWN PAYMENT DILEMMAS

One of the most frequent questions homebuyers ask me is, “How much money do I need for a down payment?” Fortunately, there are some mortgage options available that only require a down payment of 5% or less of the purchase price. But remember the larger the down payment, the less you have to borrow and the less you’ll have to pay in your monthly mortgage payment.

Loans with less than the industry standard of 20% down generally require a mortgage insurance policy to secure the loan. Also keep in mind that you’ll need money for closing costs, moving expenses and possibly, repairs, decorating and landscaping.

Lenders take all this into account when they are deciding the maximum loan amount that you can afford. They are also interested in where you got the money for the down payment. What business is it of theirs? Well, consider how carefully lenders look at your earnings, assets and credit history. They naturally are concerned that if you borrowed the money for your down payment, you may be over-extended. Expect lenders to look with suspicion on recent large deposits to your savings account. Even genuine gifts from family members will probably require documentation, if they allow them at all.

If you’d like a copy of my special report on how to buy a home with little or no down, dial this Toll Free 24-Hour Recorded Information Hotline – 1-800-530-0076 and enter extension #1035. You may have the report faxed or mailed to you.
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