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| Down Payment |
| How much down payment do I need to put down? |
The answer to this question is: "It depends".
These days however, you can start at zero and go to whatever money you can
afford to put down.
Zero-down loans are relatively new but are gaining popularity as lending
institutions become more comfortable with them. One of the reasons lending
institutions are getting more comfortable is that most people do not
default on their loans and lending institutions understand this. Nowadays,
many advertised homes have no money or very little money down. These can
prove to be an excellent way to go but you should carefully examine the
details of these offers. In most cases, however, you will need to put some
money down. The lender feels that the more money you put down for the home
the more likely you are not to default on the loan because you have equity
in the home.
It is recommended to put down about 20 % or more of the cost if you have
that amount of money available. This is known as 80% Loan To Value ratio
(LTV). If you put down less than this you will be required to pay Private
Mortgage Insurance (PMI) which protects the lender in the event you
default on the loan. PMI is not tax deductible and can cost anywhere from
$25 to $65 per month for a $100,000 loan. It's determined by the size of
the down payment, the type of mortgage and amount of insurance. Monthly
PMI is paid with the mortgage. Remember that under the federal law the
lender is required to cancel the PMI once the LTV ratio reaches 78% or, in
other words, when your mortgage amortized to 78% of the original value of
the house. The borrower must be current on all mortgage payments and the
lender must tell the borrower at closing when the mortgage will hit that
78% mark.
Call us today at 866-230-5633 and you'll be amazed at the loan you can
get, and the speed and service from which you will obtain it. Download our application
and authorization
form fill out, sign and fax to our office at 956-838-1754. Will process
application and call you right a way with an answer.
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