Down Payment for a Mortgage: Where Can I Get Money?

House on top of banknotes

House on top of banknotesThe down payment or the initial amount of money needed to finance a house with a mortgage is one of the biggest hurdles for many homebuyers. This can range from about 3% to 20% (or more) of the property’s sales price. The lender, for the most part, prefers buyers who can make a substantial down payment, as this lowers the amount of loan borrowed, which then minimizes the risk.

Mortgage lenders in Cookeville note that accumulating enough money for down payment can be a challenge. Here are some of the ways to help you deal with the payment hurdle:

Save more of your income.

By finding more opportunities to cut your spending or tighten the purse, you can add some more money to your down payment. This may mean cutting back on your morning lattes, packing lunch instead of eating out, or cutting out cable. Check this out for a few other ways to save.

Add extra income.

If you can, it is wise to get a second job to earn extra money. You can also ask your boss for a raise. If these options are not possible, you can ask other family members to pitch in until you reach a certain amount.

Use a gift.

The rules about using gift money as a down payment vary depending on the loan. The gift, furthermore, needs to be properly documented through a gift letter and financial statements. Lenders won’t accept if the gift is disguised as a loan or borrowed money.

Cash in some savings.

If you have a second vehicle, you may consider selling it. You may also want to dig through your closet, basement, or attic and look for valuable items that you can sell.

Consider loans with little down payment requirement.

Insured mortgages like Federal Housing Administration (FHA) and Veterans Administration (VA) require little to no down payment. You, however, have to be wary of private mortgage insurance, which can increase your monthly payment.

You have the final say on how much down payment you can comfortably put down, but it is advisable to put more. When thinking about an amount, don’t forget to consider other expenses like closing costs, insurance, moving costs, and furniture/appliances.

3 Essential Questions You Should Answer While Searching for a Home Loan

Toy house on top of dollar bills

Toy house on top of dollar billsThe increase of lenders and loan features on the market means that clients now have many options to choose from. That’s great news for homebuyers. As competition increases, interest rates become friendlier. Deciding which loan is perfect for you, however, as difficult as ever, particularly for first-time applicants. Here are three important questions that can help you make an informed decision:

What are your specific needs?

Before you make a final decision, Bonneville Multifamily Capital reminds that it pays to know what loan features are ideal for your preferences. Are you looking to build multi-family rental units, then you are better off taking a Freddie Mac multifamily loan that’s suited for this specific purpose. Of course, you also want to think about whether you’re comfortable with a fixed or a variable rate, as well as whether you may have the need or a repayment holiday in the future.

What’s on the inside?

Don’t let an interest rate that seems awesome fool you. At the end of the day, interest rates are designed to entice clients. It’s what on the inside that matters, so look at all terms carefully. Are there other fees that are attached to the mortgage? Take a particular interest in the mortgage comparison rate as this gives the overall figure you need to pay, not just isolated aspects.

Do you need help?

If you can’t make up your mind, don’t hesitate to ask for help. There are dozens of mortgage brokers around with a vast experience in dealing with mortgages. If you can explain to them what your needs are, they should be able to find the perfect loan for you. They can also help you get preapproved for a loan quickly, as they know the insider secrets of the trade.

While lenders have taken quick actions to meet the specific needs of modern homebuyers, it’s still your responsibility to know as much about mortgages.


3 Instances That Indicate Adjustable Rate Mortgages Are For You

Mortgage loan agreement application with house shaped keyringWith interest rates starting to jack up, funding real estate purchases continues to be difficult for a lot of people. Most of the time, borrowers tend to go for the usual types of loans such as a 25-year fixed mortgage, which leaves most of them in crisis.

What Is Adjustable Rate Mortgage?

An adjustable-rate mortgage (ARM) is a type of interest rate system that gives the borrower an interest rate that changes at certain periods of the loan. It provides the borrower with fluctuating interest rates over the span of the loan which depends on market conditions. This kind of loan usually starts with a lower initial interest rate than the typical fixed-rate loan.

If you are on a hunt for the perfect home loan in Tempe, VIP Mortgage recommends the ARM. But before anything, ensure the following:

1. You have enough income

If you think that your current income is enough — or you think you will get a raise soon — to pay for the potential higher mortgage payments driven by higher interest rates, ARM is for you. It can help you budget your money on the onset because it has a free fixed interest period, lower closing costs as well as lower fixed interest rates compared with a fixed-interest-rate mortgage.

2. You plan to stay for just a couple of years

If you plan to just live in your loaned house in a short span of time, the rising interest will not pose a problem for you. However, if you plan to own it for a long time, you might want to consider a more stable type of interest rate system.

3. You are not planning to take other loans

With the instability that this type of interest rate system offers, you might not want to endanger your funds by taking other loans in the near future.

The ARM has its pros and cons. Do your research. If this is for you, you’d be able to benefit to it a lot. It can save you a lot of money. Give it some time, talk to your loan officer today!

Be Worry-Free: Retiring Mortgage-Free

Mortgage Lending in Baltimore

Mortgage Lending in BaltimoreIt’s always ideal to retire without the financial burden of a mortgage. This is because its means spending your extra money or vacations or in having fun with families or friends. While some retirees don’t mind paying for their home loan, it’s great to have peace of mind and exit the career land mortgage-free.

Here are some ways to retire without a mortgage to pay:

Make Extra Payments

Mortgage lenders in Baltimore note that extra payments can go a long way in paying your mortgage off faster. You can cut on other household expenses and apply the savings to your mortgage. An extra $100 every month can save you thousands of money on interest and pay off the entire loan several years earlier.

Refinance the Mortgage

Paying off a mortgage earlier is possible if you want to switch to a shorter-term. It’s a good idea to refinance a 30-year mortgage to a 15-year loan, especially if you still have more than 20 years left on the mortgage. Your monthly payments will be higher, but you can be loan-free 10 years earlier.

Take on a Roommate

If you got a spare bedroom, consider getting a roommate. The rent from a roommate can help you make extra mortgage payments and pay off the loan more than a decade earlier. Your rental income can also be beneficial in paying utilities such as electricity, phone, cable, and gas.

Consider Downsizing

Retirement is better if you decide to keep things simpler. This means downsizing to a smaller home in the neighborhood where family and friends reside in. The truth is, you don’t need a 4-bedroom house to have a good retirement. A smaller home is more manageable, as you’ll have fewer expenses to deal with.

Whether you’re in your late 20s or mid-30s, retiring without a mortgage sounds like a good goal. You’ll get to have peace of mind and more fun in your golden years. Be sure, however, not to take in more debt just to pay the mortgage faster.

Buying a Home: Crucial Factors Millennials Should Know

Home Buying in Ogden

Home Buying in OgdenIt’s exciting when you’re about to reach your next milestone, especially when you’re becoming more financially stable. Be it moving to another city in Utah, learning a new language, or seeing other parts of the world, many young professionals today are crossing off items on their goals list. The question is should they set their eyes on home ownership next?

Surprisingly, many millennials in the U.S. don’t seem to like owning homes just yet. One possible reason for this is they think it’s too complicated or that it requires huge financial undertaking. While it’s a responsibility they need to carefully think about, owning a home has its many merits, especially when you start young.

If you’re looking to purchase a new home in Utah as an investment or simply want a space on your own, here are some factors you should consider:

Down payment

The rule of thumb is to save as much as you can for down payment if you want to save on interest costs. Mortgage loan experts in Ogden recommend having at least 20% of the property’s price as down payment. With less money to borrow, you can better manage the interest expenses in the long run.

Credit score

It’s not only the down payment you should be considering. A good credit score can help you land a better mortgage deal. Good credit scores tell the lender that you’re responsible enough to meet regular payments. While you’re racking up work experience, be sure you’re building up a good credit score. Use your credit card wisely and pay off debts as soon as possible.

‘Hidden’ expenses

You should be aware of the ‘hidden’ expenses that come with buying a property. These are the expenses that many don’t often take into account when scouting for a home. From association fee to home insurance and closing costs, they can add up and hurt your budget if you’re prepared. Make sure you have enough financial cushion and don’t take these factors for granted when buying a home.

Buying a home is a huge milestone, and let alone doing it while you’re young. With careful planning and good financial sense, you can achieve this milestone and move on to another.

Home Loans Are Many Things, Except These Myths

Home Loan in Minnesota

Home Loan in MinnesotaMinnesotans love mortgage tales, only everyone has polar versions. Two persons could talk about a particular home loan topic but usually end up on a different page. Stories get passed down from one generation to another. Before long, everyone thinks they speak of the truth about interest rates and second mortgages without realizing what they know nothing but tall tales.

But the cycle breaks now

Such misconceptions stick around because people keep talking about them — and believing them. Today, though, you land on this page for a reason — to either validate your reservations or shed light on the most puzzling concepts of home loan.

Whatever your reason, separate facts from these fallacies:

Cash-Out Refi is Free Money

Yes, you can receive hard cash from a refinance, but it comes with a price. Cash-out refinancing is all about replacing your current loan with a new mortgage and tapping your home equity to get greenbacks all in one transaction.

This move allows you to get a lower interest rate and convert a portion of your current home equity into cash for any purchase you want, like a remodel or a purchase of a beautiful home for sale in Plymouth, MN. Not all borrowers, however, can take advantage of this option; you would need first to meet certain requirements the lender set.

ARMs Always Trump Fixed-Rate Loans

False. Both have pros and cons, and they involve a certain level of risk. An adjustable-rate mortgage can be advantageous if you moving in a foreseeable future, as you can enjoy a low initial rate early in your loan term. A fixed-rate loan, on the other hand, offers you stability throughout your term, thus giving you peace of mind your rate wouldn’t increase whatever happens.

In the end, the right choice depends on your financial situation and future plans, says an expert from MN Property Group.

No-Cost Loans are Interest-Free

This is true — if you’re dreaming. But in the reality, the “no-cost” in no-cost loans refer to the closing fees. If you take this type of mortgage, your loan would be free from any closing cost in exchange for paying a marginally higher interest rate. If your budget permits your would-be monthly repayments, you might save a considerable amount when your loan matures and reduce your upfront expenses.

Financial products change over time, so mixing up some details is sometimes inevitable unintentionally. Nevertheless, it’s never an excuse to stay financially ignorant and not help yourself separate truths from tales.

3 Biggest Mortgage Lies Unbelievably Believed Until Today

Mortgage in Salt Lake CityFor Utahns outside not in the business of home loan lending, the mortgage industry can be mysterious topic to handle. One, the financial products is downright overwhelming. Two, the number of fees associated with a single loan is impossible to learn in a single sitting. And last, the many policies and requirements among lenders make it daunting to know which credentials are generally deemed “ideal.”

This reality makes mortgage shopping difficult. Without being savvy enough, you might regret this single bad decision forever — at least for several years. For starters, forget about these lies if you want to make a sound choice:

The Lower the Down Payment, The Better

Altius Mortgage Group and other lending companies noted that most mortgages in Salt Lake City, Provo, and Orem require a certain amount of down payment. Remember that simply because you’re allowed to pay 5% of the sale price doesn’t mean it’s a boon. Well, it could be since you could buy the property within a shorter period, but it might not build enough equity on it.

If the real estate market in the area turns sour down the road, you might wish to go back in time and pay a larger down payment to have more equity on the property to begin with.

A No-Cost Mortgage Is a Scam

Any lender promising that you wouldn’t be paying for closing fees if you go for a no-cost mortgage is telling a tall tale. This type of arrangement technically removes all out-of-pocket expenses at closing, but do you honestly believe anyone would generously pay such costly fees on your behalf? Of course not. The removal of closing costs definitely comes with a price. In exchange, it would slightly increase your interest rate. Which bargain makes more sense to you? If for you to do the math, and decide.

Refinancing Is An Automatic Money-Saver

If a refinancing guarantees savings to any homeowner no matter what, then all Utahns should’ve jumped on the bandwagon. It can be disadvantageous in some situations, however. Before you refinance, consider three things: until when is the breakeven period, the amount of rate reduction, and even your future life plans. If you are planning to move out of your house in three years and refinanced it with a vaguely lower, fixed mortgage, your efforts might be rewarded with thousands of savings.

The mortgage landscape in the United States is ever changing, and it’s nearly impossible to master its ins and outs even in a lifetime. It’s always in your best interest to work with an experienced broker to assist you every step of the way.

Alternatives to a Reverse Mortgage You Can Consider


Mortgage in UtahFor a lot of people, a home where they reside is their largest single investment. What most people do not realize is how to use this investment of equity in their house to fund their retirement. A reverse mortgage loan is a home loan available only to those 62 years or older. Unlike normal loans, this kind of loan has no monthly repayments. Payment is referred until the person dies, transfer ownership of their house or failure to pay insurance or tax. Additionally, if you fail to keep the house in a good shape or happen to move out, payment of the loan can be deferred.

With a reverse mortgage, you don’t need an income. However, the interest charged is added to the outstanding loan balance every month. This means that one may end up owing more than the house’s value. Here are some top alternatives to reverse mortgages.

Refinancing an existing mortgage

If you are struggling to repay your monthly installments, you may choose to refinance your existing mortgage to free up some money. This also lowers your monthly payments. Furthermore, refinancing lowers the interest rate on your mortgage which can free up some money over your loan repayment period. Additionally, you get to retain your house.

Home equity line of credit

HELOC allows you to borrow up to your approved credit limit on a needed basis. With a HELOC, you only pay interest on the amount you’ve withdrawn. Being adjustable loans, home equity line of credit only uses your home as collateral and could be foreclosed if you fail to repay.

Home equity loan

A home equity loan allows you to borrow money by leveraging your home’s equity. It works exactly like your primary mortgage as you’ll only receive a one-time payment.


If your current home is too big, you can sell it and use this equity for your retirement needs. You can now buy a smaller house and invest as needed.

Before opting for a reverse mortgage loan, it is important to learn the basics involved and what collateral is required. Talk to a mortgage company in Salt Lake City such as American Loans to find out the best options available for you.