How to Pay for a Home Down Payment Without Having to Wreck Your Finances?

Paying more on a home down payment make a lot of sense. The bigger the down payment you make, the lower your monthly mortgage will be, and you will also increase your chances of building more equity in a short period. However, putting too much money can leave you financially stressed and leave your pockets empty.

Effect of Making a Higher Down Payment

Many borrowers usually ask if they should scrape a little more say 5% instead of 3%. However, this would not make that much of a difference in the monthly mortgage payment. When deciding on the amount of cash to use as down payment, make sure that you consider other effects on your financial plan.

According to a study’s 29% of homeowners borrowed from their retirement accounts to help pay for their mortgage down payments. However, the decision to do so is a risky one. In case you happen to lose your job you should find a way to repay the money before the next tax deadline; otherwise, it will be taxed as an ordinary income.

Expect Anything

Many people who are first time home buyers say that they do not feel financially secure after purchasing their homes. For you to remain financially secure make sure that you do not use all your savings in the down payment.

Leave some of the savings for emergencies. To reduce surprises after acquiring your new home review the home first and request for repairs where necessary.

Rachel Barrett

Rachel Barrett is the co-founder of Exclusive Reporter 24. Rachel has two college degrees; one in Business Management and the other in Computer Science. She also has a diploma in Sales Marketing. Rachel had always had a flair for investigative journalism. Rachel is a writer, business strategy coach and mentor to many businessmen and women. She has written five best-sellers which focuses on the fundamentals of mental approach to sales marketing.

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