Many lenders are offering assistance to a down payment and incuding this in the loan. It's better if you can get his opportunity so you can save the down payment you have for a back up or financial emergency situation. Example: Loan amount 95% and the second amount is 5% which are combined to make the 100%. Also ask the seller to pay the closing costs, if it is bank owned they will usually make that exception, however this is not to be included in your costs. It is an offer for the buyer so the bank can sell it to a qualified buyer. Good Luck

Wed May 21 2008, 11:48

Jesse,

Curiously, when you get to closing, the only thing the seller is going to get is a check for the net amount due them after all of their deductions are made (existing mortgage, title insurance, closing fees, etc.). If you submit an offer where you had to also submit information about how you intend to finance the property, the offer will be preceived by the seller as more solid, with a large down payment indicated on the offer. This is a bit of a falacy, since in the end, as mentioned before, the seller isn't going to get your down payment, their going to get a check from the title company, regardless of what your down payment is.

That said, someone who appears to be able to put up a large down payment, "appears" to be more credit worthy, but I think we all know that's not necessarily the case in every situation. But, sellers will perceive your offer with a down payment as a stronger offer than one with a considerably smaller down payment.

Back to what I think you might have been really asking - which is, if you submit an offer that says you're going to put 20% down, but between the time the offer is accepted and the time you close, you decide to do some other form of financing with less down, as long as you are approved for it, no one is going to care and no one can really do anything to stop you.

It can be more complicated, especially if you have an addendum for financing that gives you the option to terminate the contract if you're not able to get financing. If you submitted the offer with 20% down payment as part of the offer, then change your mind and go for a 5% down payment, but then find you can't get approved for that loan, you probably can't use the terms in the addendum to terminate the contract, because you didn't try to get approved for what you said you were going to do.

Hope this is helful,

Jeffrey

Thu May 15 2008, 08:51

I think has many answers as it depends on your financial situation. I'm a first time home buyer and have been reading more than any human should about buying homes. Building instant equity will be very good ta have when buying a home. If you can afford 5-10% which seems more common than 20% would be a good idea if you have reserves in the bank for emegency funds. PMI will be charged either way unless you do a 80/20 loan with any down payment under 20%.

Thu May 15 2008, 08:37

By putting 20% down it give you some equity in your home right from the start. But it is not uncommon to only put 5% down and some loan you only need 3% down. There are many different options for buyers today.

Thu May 15 2008, 08:25