It’s home-buying season! Despite the global situation, the housing market is still moving in Raleigh. There are many things to do to be ready to buy, and knowing what down payment amount to make is one of them.
Before putting a down payment on a home, there are a few things to know:
- Know the true cost of buying a home: A lot of new home buyers are surprised at the cost of purchasing a home. It’s not just the purchase price. There are inspections, closing costs, moving costs, renovations, taking time off work for closing, and more. Knowing the full cost of a home purchase will help one figure out how much cash is needed on hand, and this may have an impact on how much of a down payment to put down.
- Know down payment requirements: Different loans require different down payments. Some don’t require a down payment at all! Search for different loans that fit your situation.
- Know about PMI: Prime mortgage insurance is basically an extra monthly fee for those who put down less than 20% down on a home. Once one has at least 20% equity in the home, one can ask to have PMI canceled.
- Know the future cost: Putting less down now might make it easier to purchase a home, but what does paying interest on a higher mortgage amount mean down the line? How does it impact one to put a little more down, or a little less? There’s no right answer for your situation, but it’s important to run the numbers and be fully informed.
What one puts down on a home will affect the monthly payments for the duration of the loan. Knowing one’s limits and one’s options will help to make the right decision. Our finance team can help with finding the right mortgage for your needs. Contact Raleigh Cary Realty to get started on finding your next home!