If you’re thinking about buying a home in Crofton, you might be worried about putting so much money down.
Well, here’s some good news: you don’t necessarily need 20% down to buy a home. There are a number of loans out there that require as little as 3% down, and if you’re an active-duty or retired military member, you don’t have to put anything down!
You have options when it comes to buying a home! If you can’t feasibly put 20% down, give me a call and we can discuss your home-buying strategy.
However, if you do have the means to save up 20%, I highly encourage it. Here’s why.
The Bigger the Down Payment, the Smaller the Loan
This goes without saying. The more money you put down up front, the smaller a loan you’ll have to take out—which will save you in interest payments over the years.
Plus, putting down a larger down payment demonstrates to your bank that you’re financially stable and a good credit risk. The more confident your bank is in you, the lower your interest rates.
Lower Interest Rates & Monthly Costs
In addition to your lower mortgage rates, you won’t have to pay for Private Mortgage Insurance or PMI when you put down 20%. Some of the loans that require smaller down payments make up for it by requiring PMI.
PMI is an insurance policy that protects the lender, and they include the fee for it with your mortgage payments every month.
Your Offer Will be More Competitive
In a market as competitive as Crofton, it’s not uncommon to see multiple offers come in on the same property. The larger your down payment, the more trustworthy you appear to the seller.
It’s all about confidence! The bank (and the seller) wants to know that you have enough money to afford their home.
Tips for Buying a Home in Crofton
Ready to take the plunge and become a homeowner in Crofton? I have the resources to assist. Give me a call today so we can discuss your plans and come up with a strategy to find the right home for you.