If you're thinking of purchasing a home for sale in Sacramento, it's in your best interest to make a 20 percent down payment for the following reasons:
- Better chance of getting a mortgage – "New 'Qualified Mortgage' rules were just issued by the Consumer Financial Protection Bureau," states Trulia, an online real estate research company. "Now, home buyers will have to meet a 43 percent debt-to-income ratio. That means that after you add up mortgage payments, property taxes and other debt, like revolving credit card balances, car or student loans, your total debt has to be less than $43 for every $100 in income you earn per month." By making a 20 percent down payment, you'll reduce the size of your monthly mortgage payment, increasing your chances of qualifying for a mortgage.
- Build equity instantly - A large down payment puts equity into your property immediately, which is important for every homeowner.
- No private mortgage insurance - In some cases, lenders will require that you pay private mortgage insurance, which protects them in the event that you default on your payments. However, this only applies to borrowers who pay less than 20 percent up front. By making a 20 percent down payment, you can avoid this extra expense.
Are you ready to begin looking at Sacramento real estate listings? You need a Sacramento real estate agent who has years of experience in this market and an impressive history of real estate transactions. Over the years, Jon Hesse has become one of the top real estate agents in Sacramento. He can answer any questions you have and help you find the home of your dreams.