Once you have decided that you are ready to buy your next home, it is time to begin thinking about your financing options. Determining how much you need to put down for a down payment is the first step in finding your dream home but many find this step confusing. It is important to know that when it comes to your down payment, you have options.
Knowing how much of a down payment you need to put down means knowing what type of lender and loan you are dealing with, the interest rate of your loan, and the source you are choosing to use for your down payment.
Find out if the mortgage will be a fixed rate mortgage or a variable mortgage. The type of mortgage will decide the amount you pay for a down payment. A fixed rate mortgage is a monthly loan that is a certain amount of money. The payment for a fixed rate mortgage stays the same while interest rates may fluctuate for a variable mortgage.
Calculating your down payment is as simple as analyzing the full loan amount, cost of your home, and the duration of payment. If all else fails, the easiest option is a loan calculator that you can quickly find online.
You have choices in what way you choose to pay your down payment. Whether it is from asset sales, a homebuyers plan, property sale, or saving, it is up to you to choose the source of your down payment.
If you choose to use your savings to pay the down payment, make sure you are prepared to explain large deposits or transfers. If you will be using the money you have made from selling a property you must have proof of ownership and a sale agreement ready for show.
The Barr Team is Southern California’s real estate solution team ready to help you and your family find the home of your dreams. Contact The Barr Team today for the buying and selling of your home!