How Big Should Your Down Payment Be?

Deciding how much you want to put down on a home is a tough choice. There are advantages to large and small down payments.

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Should you put down as much money possible on your next home purchase, or should you put the minimum amount down? This is a tough question to answer and there are benefits to both strategies. Here are the arguments for each of them.

Let’s say you have the money on hand to put 20% down on your home purchase. If you do that, you won’t have to pay the private mortgage insurance that you will have to pay if you put less than 20% down. Hitting that 20% mark will also ensure that you get the best mortgage interest rate possible.

If you simply can’t afford a high down payment and instead choose to put down 3% or 3.5%, you’re going to get a better rate of return on the money you’re investing. You are also able to take that money that you don’t use on the down payment and invest it in another vehicle. One thing I know for sure is that you shouldn’t clean out your savings to buy a home. You always want to have a backup plan.

Don't blow your savings on a down payment!

When you’re thinking about buying a home, you need to sit down with a mortgage professional who will ask you the important questions that will determine what kind of loan you qualify for, the mortgage rate you’ll receive, and what your monthly payment should be.

If you need a recommendation for a great lender, we’d be happy to provide you with one. If you have any other questions about buying or selling a home in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

A Few Tips for Buying a New Construction Home

What happens during the new construction process? Today, we have a few tips and tricks to help you buy a new home.

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Buying a new construction home is a little different than buying a resale home. You need to think it through before you get started. Today, I have a few tips and tricks to help you through this process.

First of all, you need a real estate agent that is going to represent you. When you visit a new construction site, the folks that are there are very helpful and informative. However, they represent the builder’s best interests, not yours. We want to look out for your best interests. You need an agent working specifically for you.

When you do buy a new construction home, the builder probably won’t give you much of a concession on the price. You will probably have to pay full price. However, there are other opportunities for concessions. The builder may pay some closing costs or include some appliances and upgrades.

It is important to keep home values the same in those neighborhoods, which is why you won’t get much wiggle room on the price of the home. However, your real estate agent can help you find other opportunities for concessions.

You will probably need to use a builder sales contract form. Don’t be thrown by that. Unfortunately, those are written for the builder’s advantage. Builders do not use the standard form that we agents use.

You should make sure that you ask about the builder's warranty. How long does it last? What does it cover? Make sure you get that information in writing.

Make sure that you keep track of any changes in writing.

If you are visiting a model home, keep in mind that what’s in the model home may not be in your own. Find out which items are different from the model home and get that information in writing as well.

You should also keep a written list of all of the changes and change orders along the way. You will be asked to pay for those, so you’ll want to know exactly what the cost was and when the work got done. Keep those change orders together.

Finally, make sure that you get your own independent home inspection on the property. Since it's new, you may think that you don’t need an inspection. However, people aren’t perfect, and sometimes things don’t get completed correctly. It’s always good to have a fresh set of eyes and get your own home inspection.

We have even more tips to help you buy a new construction home. If you would like the full list, just give us a call or send us an email. We can definitely send that to you. Be sure to reach out with any questions you might have, as well. We would be happy to help.