By Desare A Kohn-Laski
Buying own house is a dream come true for many individuals. It is usually regarded as the sweetest fruit of hard work and long-term savings. But for some reasons or two, paying the whole price of your dream house may be difficult. There are other important things needing adequate allocation of budget. There are also emergency situations that need instant funding too. This is when the down payment becomes necessary and there are several factors affecting its amount.
One such factor is credit score. This is the ratings you get from credit companies. It is determined by analyzing your capacity to repay the house mortgage by considering your outstanding debts from other companies. In some instances, the length of your employment becomes an underlying factor to determine the rating.
The home down payment is also directly affected by your employment. Most banks and home financing institutions require their clients to have a stable job to qualify for their programs. A steady income serves as their greatest assurance that you’ll be able to repay them in whatever terms must be approved or agree upon. The monthly or the annual salary of an individual becomes an influential element to compute for the down payment. There are several employment documents which might be required from you. This usually include certificate of current employment, pay slip, and company ID.
With regards to the house you are buying, an associated factor would be its total purchase amount. This is usually computed against the duration you are going to pay for it. The amount of the house goes up or down depending in its size, location, and whether it is empty of fully-furnished. Bigger houses will generally have higher down payments. Those located on gated communities also have higher prices than those which are not. Of course, a fully-furnished house will also have greater down payment than homes which you need to furnish yourself.
Home financing institutions have become wiser. Whatever their slogans may tell you, it is still business that drives them to seek clients like you. They consider other factors to help you make your down payment. These factors may include ownership of other properties like business establishments, cars, or jewelries; additional income stream like part-time, home-based or online jobs; or financial capacity of wife or husband. Why these extra factors are looked upon? They also serve as checkpoints if you will be able to repay them within the stipulated time frame.
Buying a house is a difficult endeavor because of the down payment involved. As such, you should always plan carefully so as not to be in a financial crisis afterwards. Your local real estate agent is willing to help you look for a house that has low down payment.