When you’re in the process of buying a house, you have a lot of things to consider, especially if you’re not buying outright with cash. If your plan is to seek a home loan, then you have the issue of filling a down payment, but what is that exactly? What does it mean to you? Most importantly, how much of a down payment are you going to need for your Fort Lauderdale mortgage?
The First Question; What is a Down Payment in Fort Lauderdale Mortgage?
The down payment is the amount of money that you will spend up front to buy the home, and it is normally combined into the home loan to meet the purchase total. Along with the down payment amount, there are several other factors that will determine the amount you would be paying total. Some of these include:
- Credit Score
- Credit History
- Total Debt
- Annual Income
All in all, it can be pretty confusing and pretty complicated to figure out, but at the end of the day, there are tools out there that can help you to come up with a number. Mortgage calculators, for example, will be able to calculate your amount using the above information, and most lenders do offer this feature.
How Much Do you Need to Save for your Down Payment?
Here’s a fun fact: the higher your down payment, the lower your monthly mortgage payment is going to be, and that probably comes as welcome news to you. The amount you need, however, will depend on your loan type. Take the following into account:
- Conventional Loan (30 Year Fixed Mortgage) – 5-20%
- Jumbo Loans (Amounts above the typical Freddie Mac Limit) – 10%
You can feel free to put down less than 10% on your conventional loan, however, that will ensure that you pay a much higher mortgage insurance rate, unfortunately. The ideal solution here would be to pay 20%, however, that can be too difficult for many first-time homebuyers. In fact, it could take several years for you to build up to that amount, especially if you’re on a lower income level. That said, there are alternative programs that allow for a zero or 3.5 percent down payment, though we’re going, to be honest: a 0% down payment is not the easiest thing in the world to get.
FHA Loans and You
Some of the best mortgage rates in Fort Lauderdale often come from the Federal Housing Administration or FHA. The majority of these loans do require a 3.5% down payment, and in addition to that, you will need to make sure that you have a decent credit score.
First-time buyers find this loan option to be very appealing, and because they are federally insured, the lender is protected in the event the borrower defaults on the mortgage payments. That said, they are much easier to obtain than other conventional mortgage types so long as you have a good credit score. If you do not have a great credit score, however, it is strongly recommended that you try to fix it before you attempt to obtain a loan of any type.
Getting into the Home you Deserve
When you’re in the market for a new home, you’re probably confused, you’re probably tired, and you probably want to get the loan process over and done with as quickly as possible. The importance of going with an experienced lender cannot be overstated here! You need to choose someone who has been around the block a time or two, so to speak. Give us a call today and ask us about our nationwide mortgage options and learn how you can become a homeowner much sooner than you think. It’s time to stop living month to month, and time to put down some roots. With our help, you can do exactly that.