The Redmond Group

Legend Home Lending

  • Home
  • About Us
  • Blog
  • Mortgage Info
    • First Time Home Buyer Tips
    • First Time Home Seller Tips
    • Home Appraisal
    • Home Inspection
    • Loan Checklist
    • Loan Process
    • Mortgage Glossary
  • Pre-Qualify Now
  • Contact

The Pros and Cons of Borrowing the Down Payment for Your Next Home

August 31, 2016 by Joel and Jodi Redmond

The Pros and Cons of Borrowing the Down Payment for Your Next HomeWith the rising cost of real estate, many people feel that now is a good time to buy a home to ensure a good financial future. However, if you haven’t saved up enough money to make a down payment, it’s possible you may be considering whether or not you should borrow the funds. If you’re considering a loan from friends or family, here are some points you may want to think about before asking for a loan.

Getting Out Of The Rental Market

With even the rental market seeing huge increases in its rental rates, buying a home can be an even more beneficial purchase then ever. While your rental check is gone once you’ve paid it each month, payments on your mortgage will become a part of the wealth you’re building and the equity in your home. It’s just important to consider the property taxes and maintenance that go along with purchasing a home beforehand, as these added costs might end up making for a poor investment if they’re too costly.

Saving Money On Insurance

You may have heard many different things about the percentage your down payment should be, but because you will have to pay mortgage default insurance if you put less than 20% down, it can be an added boon to borrow the additional funds needed. While borrowing the money can be great in terms of lowering your monthly payment and making your home less costly in the end, it can also cause financial strain for you since you’ll have to pay back the funds over time.

Testing Your Relationships

It goes without saying that money can often times get between people, and when it comes to borrowing a significant sum of money from family or friends, this can improve your relationship or even cause a rift. While you may be willing to take this risk if you have no concerns about paying those who have lent you money back, if something arises and you’re unable to give back the funds, this can create issues that may be more problematic than renting a little longer.

Many people consider borrowing the money for their down payment in order to come up with the 20%, but it’s important to consider what borrowing this money can mean for your financial future and your personal relationships. If you’re currently looking into a new home, you may want to contact one of our mortgage professionals for more information.

Home Mortgage Tips Tagged: Down Payments, Home Mortgage Tips, Mortgage

Joel and Jodi

Contact Us


Call Us! (281) 218-6848
Legend Home Lending
Joel NMLS #231806
Jodi NMLS #231807
Legend Logo

Connect with Me!

PRE-QUALIFY →

Let’s Keep In Touch!

  • This field is for validation purposes and should be left unchanged.

Quick Links

  • Get A FREE Rate Quote!
  • Accessibility Statement
  • About Us
  • Contact

Looking For Something?

Equal Housing
Legend Lending Corporation • NMLS # 229421 | NMLS Consumer Access | Privacy Notice | Texas Recovery Fund Notice

Legend Lending Corporation, NMLS 229421 is an equal opportunity lender.

Archives


Joel & Jodi Redmond
17047 El Camino Real
Suite 150
Houston, TX 77058

Copyright © 2023 The Redmond Group  ·  All rights reserved   ·   Log In