Most of the time, the goal is to put as little down as possible on a home, but paying more money upfront has its advantages. Here are just a few of them for you to consider.
Putting a large down payment can save you thousands of dollars of accrued interest over the loan term. This is especially true with 30-year mortgages.
A larger lump sum can also reduce your rate! Basically, the larger the down payment, the less risk it is to a lender, thus lowering your interest rates.
Similarly, if you have poor credit, you can lower your rate by putting down larger payment upfront. With a large down payment, you reduce your "riskiness," and lenders can offer you a better mortgage rate, regardless of credit score.
If you opt for a conventional mortgage, a substantial down payment can help you avoid paying mortgage insurance. To qualify, you must have a loan-to-value ratio (LTV) of 80%. That means that you'll need to make a down payment of at least 20% of the home price.
If you're unable to put down a large sum all at once, there are still affordable options! Consider the following loans and contact us to learn more about each of them (and more!):
Federal Housing Administration (FHA) and Veteran Affairs (VA) loan provide better financing options for borrowers making a small down payment.
For example, FHA mortgages require as little as 3.5% of the total loan cost for a down payment. VA-eligible borrowers have no down payment options along with inexpensive closing costs.
There is also the option of waiting and saving for a large down payment. However, with government loans, it may not be necessary. Contact us today to see which is the fastest and most affordable option for you.
All loan approvals are conditional, not guaranteed and subject to lender review of all information. Loan is conditionally approved when lender has issued approval in writing, but until all conditions are met, loan cannot be funded. Specified rates may not be available for all borrowers. Rate subject to change with market conditions. C2 Financial Corporation is an Equal Opportunity Mortgage Broker/Lender. In California, This licensee is performing acts for which a real estate license is required. C2 Financial Corporation is licensed by the California Bureau of Real Estate, Broker # 01821025; NMLS # 135622. For state licensing information outside of California, click here. C2 Financial Corporation is approved to originate VA and FHA loans, and has the ability to broker such loans to VA and FHA approved lenders. C2 Financial Corporation is not acting on behalf of or at the direction of HUD/FHA or the VA.