(4) Down Payment
Down Payment, also known as Money Down, on any real estate purchase is one of the key deciding factors for buyers along with monthly payments.
In real estate, if you finance less than your monthly payments or installments will also be less and more money you will save in long run.
Generally, lenders prefer to have a minimum of 5 % to 20 % of the total value of the house as a down payment.
Your down payment will also have a direct impact on the loan-to-value ratio, or the amount of equity you own in your house when compared to your mortgage.
Therefore, a large down payment means you have more equity in your house and vice versa.
(5) Liquid Reserves
It is one of the most popular factors to know before applying for mortgage. Liquid reserves are referred as amount of cash left with you after paying down payments and closing costs.
If you are having large amounts of liquid reserves left with you in your accounts than lenders will consider you as a low risk candidate for approving mortgage terms & conditions.
Some of the best sources of liquid reserves are bank accounts, stocks, bonds, or 401Ks pension account.
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