Posted on November 9, 2017
There are several hindrances that we face while embarking on a new adventure and perfection is the enemy of execution. During that time, it is important to remember that things don’t have to be perfect at all times, especially when you go on board on a new venture like buy a house in vancouver, but ask some questions to yourself such that you can fix the time of buying your dream house. When is the right time to buy a home? When this question arises, you need to address some of the fundamental questions like can I afford the down payment? If I put all the money down, will I be able to face any emergency crisis, traveling expenses and food; am I prepared for the extra expenses involved in the process. Get cleared with all these questions, if your answers are a yes, then now is the right time to buy a house. Let’s explore.
Are you planning to go low on the down payment of your house? Read this!
Going less on your down payment is not advisable as a matter of fact because it will lead to further other complications. By paying suggested sum, you immediately own 20 percent of your home, which is called as equity. The more you pay with your cash, the more you own outright. Now let us see the complications of the flipside of this. Higher interest rate on your mortgage and higher closing costs, this will further lead to a higher mortgage interest rate and more money spent during the life of the loan (remember compound interest). Moreover, as aforementioned, in addition to the mortgage, you will also have to bear the extra costs associated with mortgage insurance. Lastly, if you are going to put down less than 20 percent, then the interest on your loan will be higher, so’s the monthly payment and you will certainly have to buy a house in vancouver bc. So, this is where it might make sense to wait for a couple of years or more to save a considerable amount of money for your DP and then go for it at one go.
Other options to consider when going less on down payment:
When you consider going for a down payment that is less than 20%, there are several other options that you can explore and take advantage of and it includes:
The aforesaid loan types are said to help! If you are an active duty or honorably discharged service member, then VA loans are a good option to mull over, the best part about this loan is that it requires 0% down and no mortgage insurance. On the other hand, you can make the most of USDA loans, rural housing loans, aimed at helping low- to moderate-income households; you can also get conventional loans from mortgage lenders or from any bank, last but not the least, the FHA loans, having the most lenient approval requirements, its mortgage insurance will have to shell out for the life of the loan.Tags: buy a house in vancouver, mortgage insurance, Selling your new house gastown