Buying Power Step 3

For step 3, Understanding Down Payments, I talked to my mom's old friend, Don, who works for a mortgage company. We discussed how to find the right down payment, the dangers of paying too little or too much, and much more. Below are some key points.

- Paying too little can mean a additional fee because you are more of a risk to the lender

- Paying too little can also mean more having interest on it

- Paying nothing doesn't really have too many problems except those listed above

- Paying too much means less money in the bank ( ie if someone loses their job right after buying a home)

- People often say to pay it all off ASAP so the bank can't take your house even if you are on-time with your payments, but that practice of taking homes has been outlawed

- Probably not the best plan to over pay if you can (see above)

- Monthly payment should be about 20% of your income, but no need to adjust if you get a better paying job.

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