Homes of New Hampshire Realty



Posted by Homes of New Hampshire Realty on 9/13/2017

If youíre hoping to buy a house in the near future, youíll want to focus on saving for a down payment.

Down payments are a way to let a lender know that you are a low-risk investment, and a way to save money on interest over the term of your loan.

If you have your other finances in order--a good credit score and stable income--thereís a good chance that making a 20% or more down payment will land you a low interest rate that can save you thousands while you pay off your loan.

How large should my down payment be?

The larger the down payment you can afford, the more money youíll likely save in the long run. While there are ways to get a loan with no or very small down payments, these arenít always ideal.

First, if you put less than 20% down on your home loan, youíll be required to pay private mortgage insurance, or PMI. These are monthly payments that you make in addition to the interest that is accrued on your loan.

So, if you donít put any money down on your home, youíll accrue more interest over your term length and youíll pay PMI on top of that.

What affects your minimum down payment amount?

Lenders take a number of factors into consideration when determining your risk. If youíre eligible for a first-time home owners loan, a veteranís loan, or a USDA loan, your loan can be guaranteed by the government. This means you can likely pay a lower down payment while still receiving a reasonable interest rate.

When applying for a mortgage, be sure to reach out to multiple lenders and shop around for the rates that work for you. Many lenders use slightly different criteria to determine your eligibility to pay a lower down payment.

Other things that affect your minimum down payment include:

  • Credit score

  • Location of the home you want to buy

  • Value of the mortgage

Saving for a down payment

Youíll get the most value out of your mortgage if you put more money down. However, if youíre currently living in a high-rent area, it could mean that itís in your best interest to get out of your apartment and start building equity in the form of homeownership.

If you want to buy a home within the next year or two, there are a few ways you can help increase your savings.

First, determine how much you need to save. Depending on your housing needs and the current market, everyone will have different requirements. Do some home shopping in your area online and look for homes that are within your spending limits. Remember that you shouldnít spend more than 30% of your monthly income on housing (mortgage, property taxes, etc.)

Next, find out what a 20% down payment on that home would be, adjusting for inflation.

Once you have the amount you need to save, remember to leave yourself enough of an emergency fund in your savings account to last you a month or two.




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Posted by Homes of New Hampshire Realty on 8/23/2017

One of the requirements of buying a home is for the buyer to provide a down payment equal to somewhere between 3 and 20% of the price of the home being purchased. The reasons behind a down payment may have seemed a bit arbitrary up to this point. Home buyers know they need a down payment, but just how important a down payment is can often be overlooked. Once itís all explained here, it will make a ton of sense to all first-time home buyers. Why Is A Down Payment Important? The larger the amount of the down payment that you can provide, the better it will be for your home loan status. The amount of the down payment provided will affect the type of loan that you get the and amount of the loan that you get for the house you buy. For any down payment that is less than 20% of the purchase price of the home, youíll need to get PMI (private mortgage insurance). A smaller down payment may also mean that less of the closing costs will be covered up front. This is definitely something to look into because long term, it may not be a wise decision financially. Think of the down payment as the foundation of the biggest purchase youíll ever make. Check Your Finances If youíre not able to save up for a down payment, it may not be the best time for you to buy a house. The mortgage process makes you take a step back and really check out your finances. Buying a home is a huge financial commitment. If youíre unable to save properly for a down payment, you may not be ready to commit to buying a home. If you havenít been able to save up enough for a down payment, you may not be financially ready to buy a home. Itís a great way to take a look at your financial health when youíre thinking about acquiring a mortgage. A small down payment means that youíre eligible for fewer types of mortgages. Typically a down payment of 5% or less limits you to only a few different kinds of mortgages. This is important to keep in mind when planing your financial future. Also, keep in mind that the larger the down payment, the more keen lenders will be on actually granting you a loan. Renting Could Help You In The Long Term The thought of continuing to a rent over buy a home could be stressful for you. In the long term, however, itís much better to continue paying rent than to risk losing your home due to foreclosure. Being unable to make mortgage payments is a serious thing. The entire process of buying a home starts in acquiring for the down payment.




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Posted by Homes of New Hampshire Realty on 10/26/2016

The first step in home buying is getting a mortgage. Many home owners also find themselves in a maze when they start the refinance process. Navigating the mortgage process can be confusing. There is so much to know between rates, types of mortgages and payment schedules. Avoiding making a mistake in the mortgage process can save you a lot of money and headaches. Here is a list of the biggest mortgage mistakes that potential borrowers make. 1. No or Low Down Payment Buying a home with no or a low down payment is not a good idea. A large down payment increases the amount of equity the borrower has in the home. It also reduces the bankís liability on the home. Research has shown that borrowers that place down a large down payment are much more likely to make their mortgage payments. If they do not they will also lose money. Borrowers who put little to nothing down on their homes find themselves upside down on their mortgage and end up just walking away. They owe more money than the home is worth. The more a borrower owes, the more likely they are to walk away and be subject to credit damaging foreclosure. 2. Adjustable Rate Mortgages or ARMs Adjustable rate mortgages or ARMs sound too good to be true and they can be. The loan starts off with a low interest rate for the first two to five years. This allows the borrower to buy a larger house than they can normally qualify for. After two to five years the low adjustable rate expires and the interest rate resets to a higher market rate. Now the borrowers can no longer make the higher payment not can they refinance to a lower rate because they often do not have the equity in the home to qualify for a refinance. Many borrowers end up with high mortgage payments that are two to three times their original payments. 3. No Documentation Loans No documentation loans or sometimes called ďliar loansĒ were very popular prior to the subprime meltdown. These loans requires little to no documentation. They do not require verification of the borrower's income, assets and/or expenses. Unfortunately borrowers have a tendency to inflate their income so that they can buy a larger house. The problems start once the mortgage payment is due. Because the borrower does not have the income they are unable to make mortgage payments and often end up face bankruptcy and foreclosure. 4. Reverse Mortgages You have seen the commercials and even infomercials devoted to advocating reverse mortgages. A reverse mortgage is a loan available to borrowers age 62 and up. It uses the equity from the borrowerís home. The available equity is paid out in a steady stream of payments or in a lump sum like an annuity. Reverse mortgage have can be dangerous and have many drawbacks. There are many fees associated with reverse mortgages. These includes origination fees, mortgage insurance, title insurance, appraisal fees, attorney fees and many other miscellaneous fees that can quickly eat at the homeís equity. Another drawback; the borrower loses full ownership of their home and the bank now owns the home Avoiding the pitfalls of the mortgage maze will hopefully help you keep in good financial health as a home can be your best investment. .




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