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Down Payments Explained

A down payment is the amount of cash a home buyer puts toward the price of a
new home. It accomplishes a few things; first it reduces the amount of money you
need to borrow and it reduces the risk the lender takes in loaning the money. By
reducing the risk, the borrower will typically get a better interest rate on the loan
and increase the amount of home they can buy.

How Large a Down Payment Do You Need?

The amount of down payment needed depends on the type of the loan, the
lender and the property price itself. While most of the 0% down home loans of
the last decade are gone, Veterans can still purchase a home loan with no down
payment. Other programs include FHA loans with as little as 3.5% down.
Conventional loans typically require a 20% down payment, but some allow as
little as 5%.

Is it Better to Make a Larger Down Payment?

In addition to the down payment, buying a home also requires cash for closing
costs and some reserve savings to guard against unexpected financial concerns.
One thing to remember though is that any financing with less than 20% down will
require private mortgage insurance – a monthly payment which protects the
lender in the event of default.

The best amount of down payment should be determined in consultation with
your lender and your tax or financial advisor, but the quick answer is “it depends.”
By working with a trusted lender, explore your options and you will make the best
decision for your needs.

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The Home Selling Process

Are you planning to sell your home? Regardless if this is your first time as a home
seller, or maybe you’ve sold many homes, understanding the selling process can
assure you that things are going smoothly. Successful transactions don’t just
happen; it takes experience and professionals to navigate from staging to closing.

Who Are The Experts?

Real Estate Agent – Before you start, do your homework and find an
experienced listing agent in your area.
Escrow Officer – Your escrow officer is a neutral 3rd party, they take the
terms agreed to by the parties and ensures they are fulfilled properly.

Timeline For Your Home Sale

  • Meeting With Your Agent – Your agent will tour your home and discuss
    your market value (including a comparative market analysis), timing and
    financial goals in order to create a custom plan for selling your home.
    Preparing Your Home For Sale – Typically even a dated home can be
    spruced up with small changes in furniture placement, fresh paint, new
    lighting and/or minor repairs.
    Listing Your House – Once your home is ready for buyers, you will list your
    home, and your agent will implement their marketing plan.
    Offers – Once you receive offers, you will meet with your agent to review
    them together and determine how to respond.
    Escrow Process For Sellers – The buyers will complete funding
    requirements, obtain an appraisal and home inspection. As the seller,
    you will also complete any conditions you’ve agreed to, such as repairs
    or termite work.
    Closing – Once all conditions have been completed, you will close the sale
    and receive the proceeds.

The sales process is a series of steps that you and your agent will take together.
Knowing what to expect, and when, can alleviate the uncertainty you might feel
as a seller.