"How much of a down payment do I need and can it affect the amount of my monthly payments?"
Generally speaking, the more you put down towards a home purchase, the lower your interest rate will be. If you'd prefer to keep more of your own money in your pocket during the home buying process, ask your mortgage professional about 100% financing options.
Downpayment assistance programs may be available in your area. Please contact us at 888-418-4467 for more information.
The amount of your down payment can affect your monthly payments in two ways. The more money you put down the lower your loan amount will be and you will qualify for a better interest rate. The lower interest rate in combination with the lower loan amount can drastically decrease your monthly payments.
When you apply for a 100% mortgage, a mortgage putting no money down, make sure you ask about closing costs. Many times when someone is obtaining a mortgage with 0 money down, they think that they do not have to pay any money out of their pocket at all to buy the home. However, there are still closing costs that need to be considered. There are ways to avoid paying closing costs as well. One way to avoid paying closing costs is to ask for a seller concession from the seller. This is where the seller pays for a certain amount, usually most or all, of your closing costs. Another way to avoid closing costs or to have them limited would be to see if yo can take on a higher interest rate so that you will not have to come up with any money out of your pocket at all. This option will not always work in all situations. Therefore, ask your mortgage professional what your options are for no closing costs as well as no down payment if this is something you are interested in.
There are many different mortgage programs that provide many different downpayment options. Some programs require the borrower to give 20% in order to qualify where other programs only require 3% down. Your mortgage professional can review your situation and give you the best recommendation for your situation.