The Down Payment
The amount of your down payment has a big impact on the amount
you need to borrow in order to buy your house. Making a healthy
down payment of at least 20 percent of the home’s value
will reduce the amount you need to borrow and therefore the
amount you will pay interest on as well. It also means you
will probably not be forced to carry private mortgage insurance,
which can be expensive.
Option One Mortgage knows that consumers sometimes struggle
to come up with a down payment for their home. In today’s
economy, trying to save is more challenging than ever. However,
with determination, you can do it.
Start by realizing that even a small savings can make a big
difference. Encourage all your family members to “tighten
their belts” in any way they can. Take a brown bag lunch
instead of heading to the local burger joint, or start taking
public transportation to work rather than your car. Choose
cheap or free activities such as kite-flying or board games
rather than expensive outings to the movies. Take this opportunity
to teach your children the value of a dollar, and that “a
penny saved is a penny earned”.
There are other options as well. You may be able to withdraw
money from your individual retirement fund without a tax penalty
to fund your down payment. While everyone’s situation
is different, take the time to talk to your tax professional
and find out if this is possible for you.
Option One Mortgage reminds consumers that a bigger down
payment means more purchasing power, smaller monthly payments
and a lower total interest cost.