Afraid of the Unknown – Part 6 – Down Payments

    Homes for sale in Cheyenne WY

    20%? 3%? 10%? 23? 12 1/2%? 30%? 5? 18% 

    Eeeek!! What is the magic percentage that you need in order to purchase a home?

    Well, I am glad you asked because today we are going to talk about some of the programs that are available to help you get into your new home.

    The simple and straight-forward answer is that there is NO SET PERCENTAGE.

    While I still plan to share some programs that will help you, even with a down payment, let me clarify what I mean by “no set percentage.” I want to show you some of the factors that go into determining what percentage you may need. As always, if you have questions, you are welcome to contact me or somebody like Trisha Jackson at Premier Home Mortgage. Trisha is great at helping answer questions and providing both short-term and long-term solutions even to credit issues that may keep you from owning.

    On to our factors –

    Factor 1 – What type of home do you want to purchase? A mobile home in an established park will require a larger down payment amount than a stick built (permanent) home on a regular lot in the city. If you are looking for something like a duplex where you can live in one half and rent the other to help you make the mortgage payment, you will need a larger down payment than you would if it is a single dwelling just for you and your family.

    Factor 2 – Are you a military veteran? We are extremely thankful for all those who have served their country in any branch of the armed forces. One of the current benefits they have available is that it is possible to get into a new home with no money down.

    Factor 3 – What is your credit score? The higher your credit score, the better you are when it comes to applying for a mortgage. A lender wants to know that you have managed your credit well and that you can make the payments. Mortgage companies do not want to take a chance that you will default if you have not worked hard to keep your credit at a good level.

    Factor 4 – What is your debt-to-income ratio (DTI)? This is a hard number to arrive at because no person has the exact same bills as another person. Basically, your DTI needs to be low. Credit score = higher is better. DTI = lower is better. A lower DTI helps a mortgage company make the determination that you are living within your means.

    Here is some great information on how to determine your debt-to-income ratio from a Wells Fargo website. Debt-to-income Calculator

    Looking forward to seeing you on the next part of our journey,

    Mark Escalera – Cheyenne Realtor

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