Increase your down payment amount
This wisdom is much more relevant to those who are about to invest in a home, prior to closing the deal. Unfortunately you can’t retrospectively change the amount of cash you poured into your down payment–which is precisely why it’s good to give this one some quality thought before handing over the default 20% home price. If possible, opt to make a down payment that’s a larger percentage of the total home price. Some hints for making this happen: allow more time to build savings, boost your income with a side-job, or temporarily cut expenses. The extra short-term effort will be well worth starting out with a greater share of ownership in your property, lower monthly mortgage payments, and other perks.
Invest in a home that’s priced below what you can afford
This is another important consideration for those who are just starting their home search, up to the point before committing to a home purchase. There are some tradeoffs and benefits to weigh for purchasing a home that costs substantially less than your budget can afford. Buying a home that costs substantially less than the upper limit of your budget will ease the pinch of making that larger-than-standard down payment, and possibly help you qualify for a shorter-term mortgage. Both of these work incredibly well to help you decrease your home loan debt in less time. The only tradeoff is that while you can own it in less time, a lower-priced home equates to a property with smaller net worth to gain ownership of. Figure out the balance that’s right for you and your goals.
Rana Khanjani, MBA
San Fernando Valley Iranian-American Real Estate Agent
Providing Services in English and Farsi
Address: 22020 Clarendon St. 200, Woodland Hills, CA 91367