Tips to Help You Save Money on Your Down Payment Terms
3 minute read
July 4, 2019


When it comes time to buying a house, it’s crucial that you pay a larger down payment. As a result that will help you save more on interest in the long run. Nonetheless, you need to keep in mind that it should be an amount of money that you can afford. Hence, you don’t end up in a financial crisis within the next few years. That being said, here are three tips that will help you save money on your down payment:


Understand Your Down Payment Terms

When people talk about budgeting for a future home purchase, they generally refer to list prices. “We’re willing to pay $300,000,” or “We can afford $250,000, but no more.” 

You need to know how to calculate the down payment. This the first thing you need to understand, when you’re looking to buy a property. It is a key concept that everyone needs to master, but sadly, not everyone understands it.

The down payment size is typically calculated based on three factors. These are the desired initial loan-to-value ratio, your payment time frame, and the real estate market’s condition. Typically, the down payment is agreed upon before the deal is finalized. For example, the buyer may suggest beforehand that they can pay up to $300,000 for the down payment and that will be used as a baseline for the value of the property. The downpayment should usually be around 20% of the overall value of the property, as that will be the most beneficial for both parties. Remember that you can still negotiate with the seller about how much you’re willing to pay when it comes to the down payment percentage, which is the most essential part.


Take Out a Loan for the Down Payment

If you’re looking to capitalize on the rising trend of a market, consider negotiating for a special loan to pay the initial down payment. For example, the price of some properties shift rapidly. Hence, the only way to ensure that you won’t lose your opportunity is to put down the down payment as soon as possible. Therefore, if you’re in this situation, it may be in your best interest to take out a loan to afford the down payment. While this may mean that you will have debts on two fronts, it may actually save you more money on a larger interest percentage.


Look for Assistance Programs

There are many assistance programs around the country that will help you afford your dream house. If you’re looking to buy a house but you can’t afford favorable down payment terms. Then it’s best that you work with these programs because they can help you finance your dream house. The National Homebuyers Fund is one of these organizations that can help you with your real estate needs, so we recommend that you talk to them about your situation and see how they can assist you.

Besides these tips to help you save money, contacting professionals will be of great help. Aceltis Group is a professional mortgage company in New Jersey, and we can help you with all of your mortgage needs. Contact us today and see what we can do for you.

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