The 101 of Downpayments - Information You Need

How much do I put down?
It is said by many experts, putting down as little as possible allows buyers to take full advantage of the tax benefits of home ownership. Mortgage interest and property taxes are fully deductible from state and federal income taxes. Buyers using a small down payment also have a reserve for making unexpected improvements.

However, some real estate experts advise that it is more prudent to make a larger down payment and thereby reduce the amount of debt that must be financed. Talk over your down payment options with your mortgage loan consultant to determine which the best route for your financial situation is.

Can I make a low down payment?
Many private low-down loan programs insist borrowers have good credit and also that they obtain private mortgage insurance, which is a small monthly insurance payment that insures the lender against default.

Most of the private and government low-down loan programs have special requirements. These rules range from requiring borrowers to be first-time home buyers to limits on family income. In general, cities and counties require that borrowers earn no more than 100 percent to 120 percent of the county's average household income. However, some programs such as the Federal Housing Administration have no income restrictions and do not require the borrower to be a first-time buyer.

How Down Payment Gifts Work
Strapped for cash for a down payment? The Federal Housing Authority's 203(b) loan is the only loan that allows you to pay for 100 percent of the down payment and closing costs with a gift from a friend, relative, non-profit, or government agency.

Gifts from friends or relatives are still okay, but the legalities of gifts are sometimes a bit complicated. Be sure to consult your mortgage loan consultant before considering using a gift from family or friends for your down payment.

If you are interested in more information or would like a personal "No Obligation" consultation, please feel free to contact my office at 920-560-5606 x 103 and ask for Gwenn Tanvas. We are here to help you through the mortgage planning process and assure that you have all the facts into front of you to make an informed decision.

Gwenn Tanvas is a Certified Mortgage Planning Specialists who specializes in Government Programs such as FHA, State and Federal VA and USDA Rural Housing Loans. Visit her website for more information, on-line calculators and a secure on-line application. She is able to assist with transaction throughout the state of Wisconsin. Her offices are located in Appleton, Oshkosh and Green Bay and offers the convenience of one-stop shopping. http://www.WisconsinLoanTips.com or http://www.MortgageProsOfWisconsin.com she can also be reached for comment or to answer questions via email at gwennt@centurytel.net