Types of Mortgages : Down Payment
Today, there are many loan programs out there that require no or low down payment. However, not everybody will qualify and there are things you need to consider.
Why Put Money Down
- Immediate equity in your home
- Often times no mortgage insurance will be required on your loan if you put 20% down. Mortgage insurance is often around $100 per month
- Interest savings and monthly payment savings since your loan amount will be lower
Qualifying for a Low Down Payment
- Good credit rating
- Stable and high monthly income relative to your loan amount
- Cash reserve in your bank account or other assets
- Good appraisal value (more than your loan amount)
Finding Money for a Down Payment
- Gift from a friend or relative (not always qualifies)
- Loan from your 401k (not a distribution)
- Bridge Loan
- Equity from pending sale or sold property
- Garage sale, asset sale, "living low" for a couple years
- Save save save
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