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Down Payment

down payment

How much Down Payment is enough?

Purchasing your first home or considering to purchase an investment property? What real estate property do you want to purchase? A residential home to live in? How about an investment property to rent out or a commercial property to purchase for your business. High risk properties or high risk applicants will need to provide a larger amount of down payment.

No lender will give you one hundred percent of the purchase price as a loan, because that would be too much of a risk for the lender. If the borrower defaults on their loan they can just walk away from the property. Becasue they did not put any money of their own into the transaction.

The purchaser needs to have some amount of ‘skin into the game. Financial institutions will want to see that the borrower has saved up some of their own money. The borrower can go as low as 5% down payment for an owner-occupied residential property. None owner occupied properties usually need a minimum of 20% down payment. The more specialized the property the more down payment is needed.

How can we help

Trusterra Mortgage works with their clients every step of the application process. All the way to the clsoing date and beyond.  We will look at the applicants income / employment situation and compare it with their saved-up down payment. At the same time review their credit reports to make sure that everything is at a level that would be acceptable by a financial institution or other lenders.

Sometimes if the income is not strong enough to support the mortgage application we give the option to our client to increase their down payment to compensate for the low income levels. Other times, when the income is strong we can advise our clients that they may not need to provide as much down payment and can instead used those saved funds to renovate their property or use it for other expenses that can come up when purchasing real estate.

Contact Trusterra Mortgage to learn more about how your down payment savings can increase or decree your chances of getting approved for a mortgage.

 

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