| Today, Whats A Safe Down-Payment For A Mortgage |
| Articles - Mortgage |
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Just two years ago people were buying home with mortgage deals that were almost unbelievable. Lenders were approving loans with no money down, interest only, and hardly any income verification. Families were moving into homes they never would have been able to afford without these deals. These deals ultimately brought the entire financial and housing markets to a crushing standstill. Nowadays, if you think you want to buy a home, whats a safe down-payment for a mortgage?
Just two years ago people were buying home with mortgage deals that were almost unbelievable. Lenders were approving loans with no money down, interest only, and hardly any income verification. Families were moving into homes they never would have been able to afford without these deals. These deals ultimately brought the entire financial and housing markets to a crushing standstill. Nowadays, if you think you want to buy a home, whats a safe down-payment for a mortgage? Nothing less than twenty percent. Lenders do not want to accept any more risk. They don't care who you are or how great your credit is. Long gone are the days when you could even borrow your down payment in the form of a second mortgage. And, in many cases, borrowers who do have the required 20% to put down are still being turned away in droves. Or, if you bought your last home with a second mortgage where you borrowed the down payment, that won't happen this time around either. Now, banks are turning away what had previously been considered a perfect loan even with huge down payments and terrific credit. Sometimes their refusal has nothing to do with the application, either. Many individuals with outstanding credit and the ability to afford the homes that were just about given to everyone a few years ago still can't buy one. Even couples who used to get down payments from parents as wedding gifts are being turned away. Again, this type of cash isn't considered sweat equity. In other words, if it isn't your money to begin with, if you didn't earn it, then the lenders believe it wouldn't bother you one bit to lose it should you end up defaulting on your loan. If you're one of those lucky couples who received tens of thousands of dollars as shower and wedding gifts, forget about using this as a down payment. Banks don't care. They know you didn't earn it, and if you default on your mortgage you won't feel the financial pinch of losing your down payment. Perfect credit, high income, and large down payments won't even guarantee you a mortgage. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Sarah Park is a practiced Kamloops Mortgage Broker. To get more free information about mortgages and rates please visit her website at Kamloops Mortgage! |