Home loans and down payments go hand-in-hand. This term is frequently used as this is the most important figure in the taking of home loans. The total amount for down payment in calculated keeping in mind the property value and the rate per square foot in that particular area. Unlike the idea that any amount can be got as home loan it is important for the buyer to know that only a certain percentage of the value of the property is available as home loan.
Down payments consist of the amount calculated according to the total property value. This does not include payments for stamp duty costs, administrative costs, property taxes, transfer charges and other miscellaneous charges. This is a misconception that these charges are 'the down payment'. These payments have to be given along with the down payment and it adds to the total amount decided as down payment. Older properties and buildings do not get the same percentage as loans as newer and legal properties get. Banks And financial institutions as well as private lenders hesitate to approve loans for older properties as the value of this home is less and also illegal buildings that have less value than compared to legal and reputed builders. Only authorised buildings are eligible for loans.
Fha Loan To Value Ratio
Hence it is necessary to understand that down payments is not the only amount paid during purchase of a home and applying for a home loan but it also includes other administrative charges and the total sum has to be paid by the borrower during purchase of a home. Also this amounts to a big figure if the property under consideration is of a higher value.
Home Loans and Down Payment Facts