Down payments Explained

A down payment is the amount of cash a home buyer puts toward the price of a new home. It accomplishes a few things; first it reduces the amount of money you need to borrow and it reduces the risk the lender takes in loaning the money. By reducing the risk, the borrower will typically get a better interest rate on the loan and increase the amount of home they can buy.

 How Large a Down Payment Do You Need?
 The amount of down payment needed depends on the type of the loan, the lender and the property price itself. While most of the 0% down home loans of the last decade are gone, Veterans can still purchase a home loan with no down payment. Other programs include FHA loans with as little as 3.5% down. With a government backed loan like a FHA mortgage needing the minimum 3.5% for a $200,000 home, you will need to save $7,000. Conventional loans typically require at least 5% down payment, but some can be as low as 3.5%. If you decide on a Conventional loan say you are buying a home for $200,000, in this case you will need $10,000 to secure a home loan. The USDA also has a zero-down payment loan guarantee program for specific rural areas. 

 Is it Better to Make a Larger Down Payment?

 In addition to the down payment, buying a home also requires cash for closing costs and some reserve savings to guard against unexpected financial concerns. One thing to remember though is that any financing with less than 20% down will require private mortgage insurance – a monthly payment which protects the lender in the event of default. The best amount of down payment should be determined in consultation with your lender and your tax or financial advisor, but the quick answer is “it depends.” By working with a trusted lender, explore your options and you will make the best decision for your needs.

How is a down payment on a home calculated? 

The down payment is a portion of the total sales price of your home, which you give to the home's seller. The rest of the payment to the seller comes from your mortgage. Down payments are expressed as percentages. The main reason some down payments can be so expensive is because lenders typically require them before giving approval for the loan. The larger the down payment, the lower your monthly mortgage payment will be.

It is important to check around to make sure you are getting the best rate available for you. Contact me to help you start the process, I can get you in touch with exceptional lenders that will go the extra mile to help you buy the home you've always wanted. 

PREPARING YOUR HOME FOR THE COLDER MONTHS

Preparing Your Home for the Colder Months 

Now that the warm summer months are behind us, it’s time to prepare for winter. Regardless of whether you expect to see sub-zero temperatures this season or you live in one of the warmer climates, preparing your home for colder weather can save you money and hassle this winter. So before you dig out your fall sweaters, take a weekend and prepare your home for the cold weather to come.

 Save Energy 

Fall is a great time to seal drafts in the home which can suck the energy out. Check around doors and windows and replace worn weather stripping and caulking. If you use your fireplace for warmth during winter, this is the right time to have the chimney cleaned and checked for safety. Arrange a furnace tune-up complete with replacing the filter and vacuuming the vents to make sure you are warming your home efficiently.

 Outdoor Tasks 

Before the chill turns to freezing, head to the yard to winterize the exterior of your home. Check gutters for clogged leaves and other debris and examine the roof and siding for any repairs which could create leaks or drafts in the cold. If the gardening season is at its end, drain water from outdoor faucets and garden hoses. Make sure the sprinkler system is off and reinforce any exposed pipes which could burst with the cold. Fall is here. Along with the smell of baking and falling leaves, you can ensure your home is ready for winter by taking a few steps now to prepare. Save energy and the hassle of an unexpected repair by getting some routine maintenance done before the cold months come.

Here are a few easy steps to ensure your home is properly winterized:

1. Doors and Windows- Is cold air sneaking into your home through your doors and windows? You can make sure that all the weatherstripping is in place and you could even help by purchasing draft stoppers. Caulking your windows or purchase a plastic window insulation kit to keep out the cold chill.

2. Gutters-Cleaning your gutters before winter sets in can help by having a combined build-up of leaves, heavy ice/snow causing unwanted damage. It is always a good idea to routinely check the build-up in your gutters on your home so the water can flow quickly.

3. Flip Ceiling Fan Blades-YES! This helps! By simply switching your ceiling fan blades to run clockwise will push the warmer air down to the ground, saving you a little bit of extra money on that heating bill.

4. Change Furnace Filters-During the heating season it's important to change out your dirty filters. If they are not changed out regularly it can restrict airflow and increase your energy demand.

5.Protecting your Pipes-To minimize the possibility of water freezing in your plumbing pipes, wrap each pipe in a blanket of foam insulation.

6. Turn off Exterior Faucets- Undrained water in pipes can freeze, which will cause pipes to burst as the ice expands, start by disconnecting garden hoses and draining the water that remains in the faucet. An added protection is purchasing a Faucet Cover.

Almost two-thirds of American adults live in a home that needs weatherization. Among the people who do weatherize their home, 54% do it to save money on their energy bills. 44% do it to make the temperature in their home more comfortable and 22% do it to be energy efficient. Whatever your reasoning is it's best to be prepared for a cold winter and prepare your home before the snow and ice begin to fall. Your home will thank you and so will your wallet.