Focus on Your Down Payment to Reduce Mortgage Interest Rates
by Dan Wolf
on Monday, October 5th, 2015 at 8:27am.
Becoming a homeowner for the first time is an incredible experience, but it is certainly not an easy road. When you are in the steps of preparing to buy a home, one of your main focuses should be on the down payment. If you start looking at homes with enough money saved up, you can enjoy low mortgage interest rates.
Set the Minimum at 20 Percent
The lowest that you should set your sights on for savings is a 20 percent down payment. However, since you cannot determine exactly how much you will want to or end up being able to spend on a home, you should be on the conservative side and save up enough to handle this expense on the higher side.
Save More Money, If Possible
If you are not in a rush to purchase a home, but want to enjoy the lowest mortgage payments possible, you should invest a few extra months or even a whole year to save up more money. Having more money for your down payment will help you reduce your interest rate even further, and it will lower your monthly costs.
Pay to Reduce the Rates
After you have more than enough to cover a 20 percent down payment, you may decide to spend some of the spare money that you saved on buying points to reduce the interest rate on the mortgage. Although paying to get a quarter percent off of your interest rate may not seem like much, it does not take more than that to see a noticeable difference in monthly costs, which can make quite a difference over the course of a few years.
While it is important to spend time on other details such as keeping track of financial records and improving your credit score, there is no denying that the down payment plays a major role in your interest rate.
If you want help with purchasing a home for the first time, contact us today at 248-9653 or visit us online at www.anchoragehomesearch.com