Making a sizeable down payment is one of the biggest hurdles to buying a house. The ideal amount is 20% of the purchase price, but loan options today allow buyers to get a home with little to no down payment. This is beneficial if you don’t have enough money right now, but are serious about becoming a homeowner. This also means that you won’t have to empty your savings just to make a down payment.
Avoid More Debt
While it is fine not to hit the 20% mark, you shouldn’t skip or make a down payment that is too small. In some cases, waiting until you have a reasonable amount won’t hurt. You can also tap into your savings, but make sure that you have enough money for emergencies. The last thing you’d want is to find yourself in debt or strapped for cash when the unexpected happens.
Aim for an Affordable Monthly Payment
Mortgage companies in South Jordan suggest making an initial payment that will let you enjoy an affordable monthly house payment. You, of course, have the final say when determining how much to pay or save. When doing so, keep in mind that a larger down payment allows you to get a smaller loan with more affordable monthly payments. Note that this doesn’t always mean 20% of the purchase price.
Consider the Pros and Cons
One drawback of taking more time to save money is the risk of increased interest rates or housing prices. You may also miss the opportunity to build home equity, as the value of properties increases. It is important to keep these things in mind, but you should also consider the idea of securing a monthly loan payment that won’t put too much pressure on your finances.
If you’re serious about buying a house, you should also note that buying and owning one is a serious matter. While it will always be your call when deciding how much down payment to make and when to finalize the purchase, you should consider how this will affect your future finances. Contact a mortgage company today to learn more your loan options.