Changes in federal legislation regarding the mortgage industry will mean that it will be more important than ever to save for a down payment on a home. If you are looking for a home in Central New Jersey, contact The Marchany Team to find out more about how new federal laws affect your qualifications for a mortgage and how to save for a down payment for a Central New Jersey home.
One of the provisions of the federal legislation currently under debate is the creation of a Qualified Residential Mortgage (QRM). A QRM is a loan offering a lower risk of default. Because of the lower risk, borrowers will pay less for this type of mortgage, but there are strict qualification requirements. According to the details of the QRM provisions, borrowers would need to meet the following requirements:
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Put at least 20% down to buy a home.
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Have at least 25% equity to refinance.
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Have at least 30% equity for a cash-out refinance.
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House payments may not exceed 28% of before-tax income and total monthly (including mortgage) payments may not exceed 36% of monthly gross income.
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No debt repayments more than 60 days late in the last two years.
Besides putting money down on your Central New Jersey home's purchase price, there are insurance, taxes, and other home ownership costs that need to be taken into consideration. Borrowers will also need to determine the sources for these funds. The best way to put together a down payment is to take the money from several areas such as savings, investments, and other assets gathered over time.
How do you pull together money for the purchase of your Central New Jersey home? The following ideas may be helpful:
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Create a budget. Determine where your money is coming in and going out each month. This will give you a better idea of where you can cut expenses, and increase income, in order to meet your down payment goal.
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Clean out your attic, basement, and garage. Sell the things you don't need, want, or use anymore. Put the proceeds into your savings account.
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Have money deducted from your paycheck and direct-deposited into a savings account.
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Have less money withheld from your paycheck. If you get an income tax refund, you are essentially giving the government an interest-free loan. You are better off keeping that money and investing it.
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Pay off debt. This will ultimately leave you with more money to save each month, and will help boost your credit score.
These are just a few of the things you can do to save for a down payment on a Central New Jersey home. For more information and details specific to your situation call The Marchany Team at (732) 997-0019 today for down payment information and affordable homes in South Brunswick, Monroe, Princeton Junction, East Windsor, West Windsor, Robbinsville, Franklin Park, and Hillsborough in Middlesex, Mercer, and Somerset counties.
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