The Down Payment for a home.
Have you saved the down payment for a home?
It sounds to me like you are ready to take that big first step towards home ownership. That’s great. But before you start searching the internet to find that perfect home, STOP! Did you think about where you will get the down payment monies from? If you already have that saved, congratulations! Stop reading and please call me right now so that we can get started on finding your new home.
But if you don’t already have the down payment saved, continue reading. Here’s a question for you. In addition to the down payment, do you realize that you will also have to pay closing costs? Closing costs can easily exceed $8,000. And that is in addition to the down payment. Would you like to know how we may get the seller to pay your closing costs? If yes, call me to discuss.
Now, about that down payment.
Many people are of the belief that you will need 20% of the sale price as your down payment. Not necessarily so. With 20% down you will avoid paying the dreaded mortgage insurance, but if that stops you from getting into a home of your own for a few extra years, consider putting down less. The Federal Housing Authority backs mortgage plans with as little as 3.5% down. Here’s the math. If a home is selling for $350,000, a 20% down payment is $70,000. An FHA mortgage with 3.5% down requires $12,250. Many people put down less than 20%. In fact, the average down payment these days is about 6%.
So where do you get these large amounts of cash? After you have emptied your piggy bank, and gathered the loose change from the sofa, many people will go to The First National Bank of Mom & Dad. But if that is not an option, here are a few other ideas.
If you have an IRA, think about withdrawing some funds. For a first time home purchase, you may be able to withdraw up to $10,000 without a penalty. Some counties offer a first time buyer grant, but there are many restrictions tied to these grants. You may need to go the old school route, start saving. Have you considered selling one of your kidneys?
However you can, save the down payment and get started on the road to The American Dream. And when you are ready, start looking for your dream home at www.55plusinmonmouth.com or call me.
Art Reiman – Realtor