Suppose I want to buy a half million dollar car, defiantly most of the people do not have that much money. To fulfill the purchase amount I need to borrow some money as a mortgage’s if I have 25Thousand dollar in my hand and I am going to put it for the purchase of car then it is my down payment. That means my down payment is my equity and when I will add a mortgage to this it will become purchase price. Most of the country like Canada, the minimum down payment is 5% of the purchase. Now let’s take an example of a house that a person wants to buy. It is very exciting to close the deal and to have an own house. But everything is not that much easy a person needs to invest on the lender, home inspector, closing cost, insurance of title and many more they could be calculated around 3% to 6% of the total price of purchase.
Saving tricks of down payment
It is an exciting feeling to save money to buy our own house. Above we have come through the factor which is essential to buy a house. Minimum 5% of down payment is required to own a house. For that, we are going to discuss how to get money for a downpayment one by one right here.
1) first of all we have to decide that how much will be our down payment and we also have to set the time limit for that. There are three factors which affect down payment. They are a local market condition,LVT ratio that means the ratio of loan to value and lastly the exact time of buying.
2) There isa special down payment program which fulfills the requirement of down payment by shrinking with the actual down payment. There are well known down payment program is in the market, for example, the loan taken under FHA. It is a special loan known as “Federal Housing Administration”. Some other loans are VA loan or veteran affairs loan along with USDA loan. But it is mandatory to know that it can help to fulfill the down payment requirement but they have their drawbacks as well.
3) The government has also providing ease to the buyer who wants to have their own home; hence a person can obtain the benefits of the NDPA program
4) NDPA program above is a central government program but state government is also not far away to beneficiated their citizen so they have also their own down payment help which is based on state circumstances as well as a resource.
5) By seeing the highest interest, one can pay off the debt based on credit cards. Apart from this ultimately saving plays a vital role in down payment logic.
6) Now if we talk about to have a great managerial plan to save for down payment it is not so tricky. You can save some money when you get a refund from the tax paid by you. You can also save from the bonus you get for your better performance.
7) Apart from these, we can save lots of money buy cash back, by earning extra side by side. You can also put your saving ona short-termbasis so that you could gain some interest on it.
Obviously, your first home would be your biggest deal you have ever done. For that, your passion for buying a house has great impact. These above tricks can help you to get money for down payment.