Down Payment
Can you afford a down payment?
Finding the money to come up for a down payment to purchase a new how can be difficult this day and age. With the national average rate of savings at it's lowest levels since the depression most people do not have the traditional 20% down payment to purchase a house.
One of the current problems, with regards to the real estate market, is extremely high home values. Many home buyers are not able to afford a new home because of the financial stress on the mortgage payment. As buyers are "priced out" of the residential real estate market, many first time home buyer will not be able to live the American Dream of homeownership. When the residential real estate market gets to high, prices are likely to come down to allow for a new wave of first time home buyers. Like most other growth investments you can make, real estate goes in cycles and never goes straight up year after year.
In this modern era of real estate, you can buy a home with little (5%) or zero money down depending on your credit, job history and income. Since 2000, 100% financing has become one of the most popular ways to buy homes. Many people choose this because they either could not afford a down payment or they wanted to use their down payment for other investments or as cash reserves in case they needed the money.
If you are like millions of other Americans and considering buying a home you need to create a realistic budget of what you can afford. Most people take the time to do this, but they make one error. They fail to factor in property taxes, insurance and potential HOA dues (Home Owners Association) with what they are paying monthly for their mortgage. It's not only important but critical to look at all the expenses of homeownership prior to buying the home. There is nothing worse then buying a home that you can't afford and then being foreclosed on. You also need to ask your loan officer the important mortgage questions to ensure you have the right loan.
Kevin O'Connor
Mortgage Consultant
www.koloans.com
800.550.5538
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