How Much Down Payment

Q.  Do I need a down payment to by a house?

 

(Photo:  I took this in a remote area of Zion National Park on a drive on a fall afternoon.)

 

A.  Yes (Short & Best Answer) with a "*" that suggests a 'maybe'.

 

When buying a home, you are the person responsible 100% for its financing and associated payments, taxes, upkeep etc.  So it makes sense to spend a little bit of time to study, educate ourselves and ask questions to make sure we are making a decision that we can live with.

 

 

Save 20% down to avoid mortgage insurance expense and finance the difference.  This is very possible for people who already own a home, with equity, plus personal savings.  

 

 

3-5% down should be your goal.  Be cautious of buying a 'payment'.  You might end up paying a lot more over time.  Be careful getting into zero down or 1% down programs (VA, USDA and some FHA programs)  These programs can help get in, but be mindful of the payment terms, appreciation rates etc. as the interest rate will be much higher.  Be cautious of builder incentives too.  The price of the home with a builder with a low rate may be priced higher than the market - meaning you're paying more upfront than you should.

 

 

 

Kendall is a Ramsey Solutions trusted Pro.  Here is a link to one of their insightful posts/shows on this topic.  Take a little time to learn more and educate yourself and plan.  If you would like to sit with me and look at options, brainstorm and plan your home buying course, I'd love to connect.

 

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