Finding the best way to finance a home purchase can take a lot of time and a lot of research. There are thousands of lenders that all offer slightly different loan options and provide different interest rates, so how can you possibly sort through all the financing options available?
Well, there may not be a way to sort through all possible options, but there are definitely ways to narrow down the affordable financing options that are best for you. In the following slides, you will learn about different types of loans and mortgage rates and how to determine which one is best for you.
Before you even begin to apply for loans or look into possible mortgage rates, you will need to figure out how much you can realistically afford to put down on your first home. Your down payment will help determine many aspects of your home financing, including the loan amount you will qualify for and what your monthly mortgage payments will be.
You will also want to determine what total price you will be able to afford on a home, because this will help you determine how much you will need to pay back and if that is realistic for you.
Even though it is tempting to offer up a very high down payment that might strain your budget in order to get lower interest rates on a more expensive home, this may not work out in your favor.
If you pay too much on your down payment for an expensive home that may be out of your budget, you may not be able to keep up with your monthly mortgage payments even if they accumulate a low interest rate.
It is recommended to put down about twenty percent of your home’s total price as a down payment when you are purchasing a home, and if that amount is already too much for you, you may want to consider saving up more before your purchase or looking for a cheaper home.
You know yourself and your finances best, so be sure to really think about the amount you can afford to spend on a home and determine how high you want your down payment to be from there.
By Admin –