Your down payment can affect a lot when it comes to your home related expenses. Not only does a down payment affect the cost of your monthly mortgage payments, but it can also determine whether you will need to pay mortgage insurance and even have an effect on your mortgage’s interest rate.
Generally speaking, you should try and have a 20% down payment if you want to avoid paying PMI ( or private mortgage insurance). However, if you don’t have 20% for a down payment, that’s ok. Many experts, including Dave Ramsey, recommend having at least 10% of your homes cost to put down as a down payment.
If you’re thinking that 10% still sounds like a lot, you’re not alone. Luckily, our buyers specialists are up to date on programs that may be able to assist you. Options such as first time home buyers assistance and special loans can help minimize the burden of saving for a large down payment, and are a good financial move to consider! If you haven’t talked to a buyers specialist at The Monaghan Group to see if you qualify for any down payment or loan assistance programs, make sure to schedule a call today.
Additionally, if saving a 10% down payment looks like an insurmountable task, you may want to consider that looking at lower cost homes will reduce the amount needed for a down payment.
Dave Ramsey offers a great worksheet for down payment planning. You can get that HERE.