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Your Savings and Down Payment

Your First Step Toward Buying a Home

When preparing to buy a home, the first thing many homebuyers do is look at the real estate ads in newspapers, magazines and listings on the Internet. Some potential buyers read how-to articles like this one. The next thing you should do - before you call on an ad, before you talk to a REALTOR®, before you shop for interest rates - is look at your savings.

Why?

Because determining how much money you have available for down payment and closing costs affects almost every aspect of buying a home - including how you write your purchase offer, the loan programs you qualify for, and shopping for interest rates.

Mortgage Programs

If you only have enough available for a minimum down payment, your choices of loan program will be limited to only a few types of mortgages. If someone is giving you a gift for all or part of the down payment, your options are also limited. If you have enough for the down payment, but need the lender or seller to cover all or part of your closing costs, this further limits your options. If you borrow all or a portion of the down payment from your 401K or retirement plan, different loan programs have different rules on how you qualify.

Of course, if you have enough for a large down payment, then you have lots of choices.

Your loan choices include such varied programs as conventional fixed rate loans, adjustable rate mortgages, buydowns, VA, FHA, graduated payment mortgages and all the varieties of each.

Shopping for Rates

A very important reason you need to have at least some idea of your down payment is for shopping for interest rates. Some loan programs charge a slightly higher interest rate for minimal down payments. Plus, the interest rates for different loan programs are not the same. For example, conventional, VA, and FHA all offer fixed rate loans. However, the rates vary from one program to another.

If you shop lenders by phone, the loan officer will be able to tell you which programs fit and quote your rates accordingly. However, if you are shopping on the Internet, you have to develop some idea of your loan program on your own.

Writing Your Offer

Another reason you need to have a clue about your down payment is because it affects how you write your offer to purchase a home. Not only are you required to put your down payment information in the offer, but also different loan programs have different rules that also affect how you write your offer. This is especially important when dealing with FHA and VA loans.

If you are asking the seller to pay all or part of your closing costs, you have to be certain your loan program allows what you are asking. For smaller down payments, lenders allow the seller to pay less closing costs than for larger down payments. Some loan programs will allow a seller to pay certain types of costs, but not others.

Finally, your down payment also affects your ability to qualify for a loan. When you make a small down payment, lenders are fairly strict about having you conform to their underwriting guidelines. For larger down payments, they will tend to make allowances or exceptions to the rules.

Conclusion

As you can see, the down payment affects every choice you make when you buy a home. Although you should look at ads, familiarize yourself with neighborhoods, learn about prices, and read as much as you can - when you get ready to take action - the first thing you should do is figure out how much money you have available for the purchase.

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Contact Lydia

We built new homes in Holley by the Sea in Navarre FL, Woodlawn Heights, Gulf Breeze, Hammersmith, Habersham, North Harbor, Pace, FL, Cottonwood, Adrian Woods, Milton, FL Nobles Plantation, Pace, FL. and more! for over 25 years we built quality new homes and have won numerous Parade Of Homes Awards! Mr. Gooden was chosen Builder of the Year!

It has been an amazing time in my life. We are no longer Building New Homes, but now Selling Real Estate and Listing and Selling Homes!
I am very proud to work with Mr. Gooden at Gooden Homes. I have been representing Gooden for over 13 years and now I am Reselling Gooden Homes as well as many other Real Estate Properties and other Builders New Homes as well. I have the best of both worlds. I would love to help you with any of your REAL ESTATE needs.

Whether Buying or Selling? I would really appreciate the opportunity.

Currently, there are 4 bedroom, 3 bath homes, over 3000 sq ft of living area with 3 car garages, and Large Covered Patios and many extra upgrades, and most are selling for around $336,900.  Maybe you would like to Buy Your New Home Today? 

We can actively participate and help to locate your perfect place to call HOME.....

I even have 4 bedrooms, 2 1/2 baths, 2 car garages beginning in the $280's.

I can help you in selling your current home. Would you like a Market Analysis?  It would be my pleasure to help you get your facts and figures together.

Call or Text me today: 850-572-3836 or

Email: lydiajoymcdonald@gmail.com     







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