How To Plan The Down Payment Amount
When it comes to planning your down payment amount, one should now there are other expenses to pay, for which some of the money should be saved for. You should try and pay as much as you can on the down payment, it helps to so the seller you are a serious buyer which has the funds to go through the deal.
But you should not reach the contract table with your last drops of cash, there are other payments required to be paid in order for the home buying process to keep forward.
The Pros – The more cash you bring to the closing session, you will need less mortgage later on. Mortgage money means paying interest rates which make the same sum of money more expensive for you.
The Cons – When moving into a new home there are always additional expenses. There is always stuff to fix, replace and buy. What’s the use of moving to a better apartment if you can not get those tiny tweaks done because you are already feeling broke.
On to of that there are the mandatory payments for home insurance and the fees surrounding the home buying deal.
Conclusion – Plan your down payment wisely. Sum the closing costs fees and all the extras you are required to pay near the end of the closing meeting. Leave a small budget for renovations and new home fixing projects. All the rest can be your down payment to bring to the table.