I am sure you have heard the rule, you need 20-percent down payment before you buy a home. The theory behind that is solid and it makes sense for the long term goals. It also helps get the best rates from lenders.
However, rather than putting so much cash up front, even if you have the money available, you can actually benefit in putting down a small down payment as low as 3.5 percent (FHA loan), if it is your first home or moving to a new home.
As you might already know, you'll have to pay private mortgage insurance for years, and the lower the down payment, the more you'll pay. You'll also be offered less of a loan amount than borrowers who have 20 percent down, which eliminates some homes from your search.
The average home appreciation is about five percent. The appreciation is independent from your home payment, so whether you put down 20 or 3.5 percent, the increase in equity is the same. If you're looking at an investment property, putting a smaller amount can lead to a higher return on the cash investment, while also leaving more of your savings free for value-add opportunities or purchase more investments.
It all depends on your financial goals and planning. Analyzing finances is always crucial to determine what is best for your current strategy. Your trusted real estate agent will be happy to provide some answers for you.
Author:Peter Boutros Phone: 201-888-4908 Dated: October 30th 2017 Views: 699 About Peter: ...
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I believe it is my role as a Realtor, to be a resource for my clients, and help them make the best decisions possible. My Website is a great source for information, which I update on a consistent basis. I hope you enjoy.
Whether you are buying or selling, I know how important this transaction is for you, and achieving your goals becomes my number one priority.. I will work closely with you, understanding your needs, educating you on the process, and I will always be looking out for your best interest. As an agent representing one of the most dynamic real estate brands in the county, you can expect the utmost professionalism, dedication, and personalized service. I have over 7 years’ experience as a full time Realtor, successfully buying and selling real estate in Bergen, Essex, Hudson and Passaic Counties.
I live in Montclair with Emily my wife, Joey my daughter, a very large dog, and a very small bunny. Emily is a professional chef, (she is awesome) and we eat very well. Recently an article was written about Emily in one of the local papers. When I'm not working, I love spending time with my family doing just about anything. I enjoy golfing (a little rusty, but I was a 7 handi cap for 20+ years), skiing (I might be a better skier than golfer), hiking ( I love being outside in nature), and bowling (I'm in a bowling league, I love the competition. I'm also a member of the Commonwealth Club and the Montclair Beach Club (both for fun).