The Down Payment Lowdown

So, you want to buy a house. The largest hurdle, and one that actually prevents potential homeowners from taking the plunge, is the initial down payment and the mortgage. Definitely not something to take lightly, the down payment and the subsequent mortgage payments, however, should not intimidate you out of becoming a homeowner. This article from Realtor.com¬†chronicles the down payment expectations vs. the reality in different cities. Of course, the down payment and mortgage program will all depend on your location, your credit history, and the particular property you’re eyeing.

House on a heap of money

In larger cities like San Francisco, LA, or Miami, the expectation for potential homeowners’ down payment is upwards of 130% of the actual cost. While in Kansas City, the expectation for the down payment is just 71% of the actual cost meaning that the expectation is that the homeowner will pay a $17,540 down payment, while the average and realistic price is $12,490 – and this is all with a 20% down payment. The great news is that for many people, there are mortgage programs requiring just a 10% or even a 3% down payment!

All of this goes to show that shopping for mortgage programs, loan officers, and shopping for homes within your budget pay off. Maintaining good credit while renting and making the effort to save for that future down payment will enable you to make homeownership a reality. Working with the right Realtor never hurt either…

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