Understanding Down Payments
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If you’re stepping into the journey of buying a home, you’ve likely heard about down payments. But what are they really, and how do they affect your mortgage journey?
Here at Mortgage World Bankers, a proud division of Ponce Bank, we’re all about making complex things simple. So, grab a cup of coffee, and let’s break down the ins and outs of down payments in a way that’s as easy to understand as chatting with a friend over lunch. read more
What is a Down Payment?
Imagine you’re buying your dream home. The total price is a big number, right? A down payment is essentially your first financial hug to that home, it’s a portion of the purchase price that you pay upfront. Think of it as your initial investment, showing lenders like us that you’re committed to this home buying adventure.
Why do Down Payments matter:
How much should you put down?
That is the golden question! Traditionally, it's advised to aim for a 20% down payment on a home. This figure helps you avoid paying for private insurance—an additional cost that lenders charge if your down payment is less than 20% to protect themselves in case of payment default. However, not everyone can or wants to put down 20%, and that’s okay!
Many loan programs, especially for first-time homebuyers, allow for down payments as low as 3-5%. At Mortgage World Bankers a division of Ponce Bank, we are here to help you explore these options and find the best path for you and your family.
Saving for your Down Payment
Saving for a down payment can seem like climbing a mountain, but with a solid plan, it’s totally doable.
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