In most locations, you only require 5% of the purchase price as your down payment. In some instances, you may qualify to purchase a home with no money down! This helps to ensure you are dedicated to making your mortgage payments and keeping your home.
Several factors are involved in determining your purchase potential or how much you Qualify for.
Institutions have developed a product called the "Cash back Mortgage" so a buyer with the down payment but no cash to cover closing costs can still purchase a home. As long as you have the minimum down payment required, institutions are now giving you a cash reward to assist you in paying for your closing costs. You can also use this money to purchase furniture or appliances.
Definitely. Obtaining a mortgage pre-approval is an important initial step in securing a mortgage to buy a home. The lenders will analyze your current income, debt situation and credit history in order to qualify you for a maximum loan amount. This gives a clear picture of your financial parameters and an idea of your purchase price range.
Obtain a pre-approved mortgage. There are three people who will benefit from your pre-approval: YOU, YOUR AGENT, and THE SELLER OF THE HOME YOU WANT TO BUY. Do you want to strengthen your bargaining position with the seller? Get pre-approved. Do you want your offer to stand out in a case of multiple offers for the same house. Get approved. Look at it from the seller's perspective. If you had 2 offers on the table for your home, one form a fully approved buyer and the other from a buyer that hasn't made any effort to get pre-approved - to which offer would you devote the most attention?
If you have less than 25% down payment, you could take a fixed term mortgage of at least 3 years or variable rate mortgage. Therefore, the options of 3, 4, 5, 7 & 10 year term are available and it is your choice which one of these terms fits your needs. If you have 25% down payment or more, all mortgage terms are available to you and there are no restrictions.