Posted On: December 16th, 2016 5:11PM
So you are ready to buy a home? Great! If you have not explored your loan options for a home purchase, now is the time to get in touch with a quality lender to help you out. As a REALTOR®, I refer lenders that take the time to explain how a mortgage works and best determine what mortgage product is suited for you based on your situation and the home you want to buy.
One of the most commonly asked questions I hear from buyers is “What will my down payment requirement be, and are you aware of any down payment resources? The down payment required can vary from roughly 3% to 20% of the sales price, depending on the type of loan you choose.
The following are a few possible sources for the down payment money on a mortgage:
Down Payment Assistance: There are often more sources for down payment than you might imagine. That's why it's so important to get with a reliable lender. He/she will help you determine if you qaulify for down payment assistance based on your income and credit score(s).
Checking and Savings Accounts: Your lender will require and review your last two months checking and savings account statements.
Retirement Accounts: If you are using funds from a 401(k) or retirement account as part of your down payment, you will be required to document the withdrawal from the account(s).
Gifts: Gift funds are allowed on some loan types, depending on your credit score. Typically, gifts are only acceptable if they are from a family memmber. They require a fully completed gift letter that shows the relationaship of the donor.
Keep in mind, when applying for a mortgage, there are strich guidelines for documenting the source of the down payment. It is in your best interest to thoroughly discuss all your options, and you down payment sources with your lender PRIOR to enterting into a purchase agreement for a home.
I would be happy to put you in touch with one of the few trusted lenders I refer. Reach out anytime if you are thinking of buying and have questions. Text, call or email!
As your Chicagoland northwest suburbs REALTOR®, I am here to listen, help you make a plan, and work for your best interests.