Benefits of a Big Down Payment on Your Alexandria Home
Posted by David Zadareky on Thursday, July 28th, 2011 at 10:41pm.
For many, the dream of home ownership requires financing. Generally this means a mortgage and a required down payment of 20% of the home’s purchase price. In the end, your mortgage payment will be determined by how much you have saved for the down payment. While determining that amount can be tricky, patience in saving for a big down payment will prove to be beneficial.
Here are several reasons why you should save 20% or more for the down payment on your Alexandria home.
- Reasonable mortgage payments.
By saving more money for your down payment you will be able to have mortgage payments that are manageable. As an added bonus, later down the road you will notice how you saved thousands in interest. - A better interest rate.
That big down payment on your Alexandria home will show lenders that you are a low risk for defaulting on your payment; therefore you may be offered a lower interest rate. - You won’t need mortgage insurance.
By not having mortgage insurance you eliminate the need to protect the lender if the mortgage is not paid. You’ll also avoid paying several thousand a year for mortgage insurance and won’t have to pay the additional insurance premiums. - You’ll be in a better position to sell.
Real estate has its up and downs when it comes to the value of a home, and that big down payment can save you if you are ever in need of selling your Alexandria home. You will avoid being “upside down” or “underwater” (meaning that you owe more than the value of your home) which would make it harder to sell your home or make the mortgage payments. - The equity can help you during a financial crisis.
Unforeseen health problem or the loss of a job can hinder you from making your mortgage payment, but if the big down payment in your home provided you with enough equity to borrow against it you will be able to handle the financial crisis and still make the small mortgage payment.
In all, the patience to save for a big down payment for your Alexandria home will prove a solid investment that will put you in a better position financially and possibly save you thousands of dollars over the years.
If you’re in the market to make a move in Northern Virginia, you owe it to yourself to work with an exceptional real estate team committed to Going Beyond Your Expectations. That team is RE/MAX Evolution & David Zadareky.
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