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Congratulations! You've made the decision, to enjoy, what many consider, to be, an essential component of the so-called, American dream, which is the Dream, of Owning a Home, of your own! Since, for most people, the value of their house, representations, their single, largest, financial asset, does not it make sense, to proceed, in the most prepared way, which is best for you, and your personal situation? With that in mind, this article will attempt to briefly examine, consider, and review, 5 factors, to consider thoroughly, when determining, what down – payment, makes the most sense, for you.
1. Your income: Before you begin, have an – depth, conversation, with your mortgage professional (someone, recommended, and experienced), and ask, based on your personal financial situation, how much down – payment, might be needed, and necessary, for you to qualify, for a mortgage! One factor, will be your income, and the amount, you need, seek, and want. This is related to the selling price of your desired house, because the decision is generally based, on a combination of your income, debts, and the house's price.
2. Your ability to re – pay: Lending institutions use specific formulas, and percentages, as guidelines, for determining, the maximum mortgage, you will qualify for. While, the usual down – payment is 20%, there are a variety of mortgages, available, which require a lower amount.
3. Amount you have available for putting down: Obviously, you can only put down, what you have, on – hand! It is usually recommended, to maximize, this figure, because, typically, the better one's credit, and greater the down – payment, the better the interest rate, needed, and required.
4. Comfort zone: Smart home – buyers, consider, objectively, and introspectively, their personal comfort zone, and how much, monthly, would make them comfortable! It is never wise, to become home – rich, and cash – poor, because, unless one is prepared for various contingencies, and possibilities, he may become, at – risk!
5. Monthly costs: The more money, one, puts – down, the lower, will be the monthly charging charges, and costs required. This is, both, because, the more one currencies, the more the re – payment, as well as, lending institutions, often, charge somewhat higher rates, when less, is put – down! Another consideration is the term of the mortgage, as well as whether one uses a Fixed Rate, or Adjustable – Term.
Smart home – buyers, proceed, in a prepared way, and consider, what down = payment, and term, makes sense, for them. Always proceed, with your, eyes – wide – open!