Mortgage down payment calculator – Would it be very confusing, if you were told: what you have will affect what you do not have? Complicated though it may sound, it is fairly simple to understand, especially when you are considering buying one of the most important assets in life – a home of your own. Every potential home buyer looks up at newspaper ads, internet listings, magazines, and other possible media which could be advertising ‘Home for Sale’ ads to select their home. After you have located at zoomed on your future dream home, and before you pick up that telephone to call the Realtor, you have perhaps forgotten to have a re-look at what you already have …your own savings, because what you have will surely affect, what you do not have at the moment, a new home.
The kind of money you have saved will determine how much money you can immediately offer as ‘down payment’ and other closing costs. The amount you can afford as down payment will affect three most important future events: (1) how you can write your purchase offer (2) what kind of loan programs you might qualify for (3) the interest rates which you are likely to get.
Read: Types of Mortgage Loan
The fundamental rule that applies to all home mortgage loan programs is very simple. The lesser down payment you make, the lesser options you get in mortgage programs and if you have enough to pay as down payment, your choice of mortgages also increases. For instance, the circumstances which can limit your choices for a mortgage:
– If any one is gifting you with whole or part of the down payment.
– Though you have enough money or down payment but still wish the lender or seller to partly or wholly sponsor your closing costs.
– If you borrow from your 401K retirement plan to pay for the down payment.
There are different types of mortgage loans which one can apply for. These include:
– Government sponsored loans such as the Federal Housing Administration (FHA) or the Veterans Administration (VA). These are good for first-time home buyers, who have low to middle range income or buyers with limited cash flow or buyers with credit problems. These loans have low down payments with low interest rates.
– Conventional fixed rate loans.
– Adjustable rate mortgage.
– Buy down mortgage.
– Graduated payment mortgage
Mortgage down payment calculator –
The other reason why you should look at your saving and heck how much money you can pay as down payment is because this will be an important feature when you shop for the best interest rates. Remember, there re loan programs which offer low interest for high down payments and the interest rates vary according to the loan program. For instance, the VA and FHA loan programs have fixed rate loans. The loan officer of a lending institution can give you the exact interest rates applicable to you for each loan program which can fit the amount of down payment you are ready to make. Similarly on the internet, you can get a rough idea of the rates of interest applicable for various loan programs.