For most people, this is not a difficult decision. Most real estate buyers have little cash and are consequently looking for low down payment financing programs. However, some who are not-so-new to home buying worry that a low down payment accompanying a low ball offer will scare a seller into declining. Put up a big down payment, they reason, and the seller will be more inclined to accept a lower offer.
Not true; not even close to true. Unless there is creative financing involved, where the seller is putting up the money for you to purchase the home, the deal is always all cash to the seller. It doesn't matter whether you put 30 percent down or 5 percent down. (The only party in the equation that it makes a difference is the lender who will determine the minimum down payment for you).
As a consequence, as long as you can come up with a letter from a lender showing that you are approved for the required financing, the seller will not care how big a down payment you are offering.
If the house is going to be your primary residence, indeed make as large of a down payment as you possibly can. It just makes better sense. In return you will receive a lower, more affordable monthly payment making it easier to live within your means.
If you are looking for investment properties to buy, the rule is different. Keep in mind that the more you put down on an investment property, the less you have to invest elsewhere. The rule is not to put more money into an investment house to get a lower payment. Instead, find a different, less expensive house that is better financed.Need help finding a home to buy or a mortgage? Call JoAnn Young 321-243-4917
