Everything You Need to Know about Your Mortgage Down Payment

This gives you an incentive to make your mortgage payments.


Impress your lender and your real estate agent with legit mortgage knowledge! Because when you are making one of the most significant purchases in your life, the more you know about the process, the better. In Intercorp Mortgage Solutions we are always looking forward to tackling all those questions that go through your mind regarding this matter, so keep reading!

Down payment basics

Saving for a down payment must be in your checklist, as it is an obligation to settle a good deal. This money goes to the homeowner seller, and the rest will be paid by the mortgage you use. You can also see it as a guarantee.
At this point, you should learn that this amount is calculated in percentages. If your down payment was below 20%, you could acquire a Private Mortgage Insurance (PMI) if you want to. But if it is above 20%, you will pay a Property Insurance.
If the amount is high enough, your monthly mortgage payment will be lower in the years to come. But this can vary depending on the type of loan is best suited to you, such as a fixed-rate, an adjustable-rate mortgage, or other. In that sense, your lender will often offer you a lower rate if you can make a higher down payment because it's an upfront investment.


When it's too complicated to approach that amount

Despite being 20% the ideal number, most mortgage lenders allow you to pay between 5% to 10% of down payment, and even just 3%. Think about prices and loans like Federal Housing Administration (FHA) ones, which can be appealing to first-time home buyers with less money in their savings accounts. Also, you may be able to qualify for a home loan with a zero down payment through the Veterans Affairs (VA), but the eligibility for this type of loan is different than the rest.

To calculate its implications, let’s say that you only have 3% of down payment for a house worth of $ 200.000. That means you have accomplished to pay upfront $ 6.000 and you borrow, without interests yet, $ 194.000. But, if you ensure a 20% down payment, you would have a debt of $ 160.000.
Of course, it is still possible to pay what you owe, even if it will require you to do it in 10 or 30 years. Consider where you can obtain the money: your savings, the money you get when you sell a house, gifts, and grants from family, employers, and even nonprofits.
In Intercorp Mortgage Solutions we will not pressure you to pay significant amounts of money if you do not have it. What most home buyers do not know is that the real estate market is flexible when it comes to down payments, because before your mortgage application approval it was confirmed by your lender that you have sufficient financial stability to keep up with debts of monthly payments.

Contact us to know which loans we offer and what are their specific conditions! If you want to share your experience on buying a house regarding this subject, you can leave your comment below!

It's a fact that those who put more money down get the best mortgage rates.

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