• HOME
  • SELL WITH US
  • ABOUT
    • REVIEWS
    • In The Neighborhood
  • MARKETING
    • STRATEGY
  • HOME FINDER
  • FEATURED PROPERTIES
  • COMMUNITIES
  • VIDEO
  • CONNECT
Drowning earth
4 Steps to Natural Disaster Preparedness
March 22, 2018
interest_rates_rising_options (1)
Mortgage Options When Interest Rates Are Rising
March 27, 2018

Expert Insights: Why Do Lenders Require a Down Payment?

millennials_down_payment

It protects them should you default on the loan, especially if you fail to make payments in the early years of the loan when more is owed on it. Foreclosure, property fix-up, and resale costs could result in a loss on the mortgage loan.

That is a bad situation the lender wants to avoid. So they have historically required cash down payments of 20% of a home’s purchase price.

However, if you purchase private mortgage insurance, the down payment requirement can drop to 5% or 10% of the purchase price.

Few lenders will lend the full value of a home unless they have special guarantees, such as that offered by the Veterans Administration (VA) under its mortgage assistance program.

Share
KentAssociates
KentAssociates

Related posts

December 5, 2020

5 Tips for Homebuyers Who Want to Make a Competitive Offer


Read more

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

YOU MAKE IT HOME  |  We Make It Happen

Margaret & Amanda REALTOR’S with Compass
Cal BRE License #00580890 & #01968969

Serving Sonoma, Marin, Napa, and the surrounding area with full-service real estate. +1 707.338.2178 or 707.338.0796

 

We Love What We Do…

  • Professional video and drone services for every home
  • Maximum value guaranteed
  • A website created just for your property
  • Access to agents all over the world

Get Inspired…