Don’t Let These Down Payments Myths Keep You from Homeownership!
X Myth!
CREDIT SCORES DON’T MAKE A DIFFERENCE IN YOUR DOWN PAYMENT
· Don’t ignore the importance of your credit scores.
With a lower credit score, you’ll most likely be offered loans that have higher interest rates.
In addition, some lenders may require a larger down payment.
X Myth!
A 20% DOWN PAYMENT IS REQUIRED TO BY A HOME.
· Having a 20% down payment is great, but not always necessary. According to the National Association of REALTORS, “roughly 60% of homebuyers financed their purchase using 60% or less down payment.” If you qualify, Federal Housing Authority (FHA), Veteran’s Administration (VA) and Conventional loans are all some of the good options that have a lower down payment requirement.
X Myth!
YOU SHOULDN’T PUT MORE THAN 20% DOWN.
· Odds are good a well-meaning friend is going to tell you to not put more than 20% down for your home loan.
The fact is, making a down payment of more than 20% may align better with your financial goals.
A higher down payment can signal to lenders that you’re a trustworthy borrower.
Plus, the more you pay upfront, the less you borrow, making your payments lower. And it’s possible you could qualify for a lower rate with a larger down payment.
X Myth!
YOU CAN BORROW MONEY FOR YOUR DOWN PAYMENT.
· Any assistance with your down payment should be a gift, not a loan.
Down Payment funds that are borrowed will need to be factored into your mortgage approval amount and you may qualify for less than you were anticipating.
There are restrictions on the acceptable sources of gift funds, so it’s important you contact us to go over the details.
