Understanding Your Down Payment
The down payment on a home or commercial property is the initial money that you pay on that property, securing it for your own (aside from option money and earnest money, which are rolled into closing costs). The down payment reflects the difference in amount between the amount of money your lender gives you for your mortgage and what the home or property actually costs. Understanding your down payment can be hard for many people, but the experts at Easy Road Home can help Austin homeowners or business owners better understand down payments and their buying options.
Different Forms of Down Payments
Ultimately, as long as you make the minimum down payment, the amount that you put down is up to you. Many people make larger down payments so that their monthly mortgage payments are lower, but the minimum is usually around 5%. There are several forms of down payments, which include:
- Gifted down payments
- Accumulated savings
- Property sale proceeds
- Home buyer’s plan
The differences between these different forms of down payment largely break down to the type or amount of financial “proof” you need to acquire and provide for your lender. For instance, for a gifted down payment, you’ll have to provide information from your financial institution regarding the deposit made into your account from the giver. On the other hand, if you are using funds acquired from a previous property ownership, then you just have to provide proof of that ownership before using those funds.
Contact a Real Estate Specialist in Austin
As down payments play a critical role in purchasing a home or commercial property, especially as it can set the tone for your remaining debt on a property, having the support and guidance of a real estate expert is often invaluable. Find out how our team at Easy Road Home can help make sure that you choose the best down payment option for your situation by calling 888-405-2817 today.