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Down Payments Tips For Buying a House

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From Quick Guide: Buying a Home Guide

Summary: Your down payment can determine your mortgage & how much house you can afford. Learn how in this video on buying a home.

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By Brett Staggs
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Brett Staggs has been working in the mortgage industry for the past 6 years. He has worked for a title company, a credit reporting company, and two major banks. For the latter, he has...read more

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Video Transcript

"Hello! My name is Brett Staggs and on behalf of Expert Village, I am going to be telling you how much you can afford for a first time home buyer. When applying for your first home loan and you are trying to figure out how much house you can afford, it is important to keep in mind that you have any sort of capability of a down payment. A down payment is basically money you are putting down on the house that they will subtract from your loan amount. So if you have a house and its value is $230,000 and I say I can put down $30 grand, your loan amount will only be $200,000. So if you do have money saved away that you can put down as a down payment, it is a great way to get a better loan and get a better rate and it is a better package altogether if you can put a down payment down on the house. Now if you don't have that money yourself but you do have a family member or relative who wants to help you out with your first home and they say, hey I want to give you some money for a down payment. The bank will ask for what is called a gift letter. Now a gift letter is very simple. All it is a letter that whoever is giving you the money has to fill out. I am so and so and this is my relationship to this first. This is how much money I am going to give them and in addition to that letter, the bank will ask for the bank statement showing that money going into your account. That way you have it all documented, they know who it is coming from and they will count that as your down payment on a home. "

eHow Article: Down Payments Tips For Buying a House

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