Anyone that is considering buying a Stockton home can quickly feel overwhelmed by the number of fees and payments that need to be made. Before the mortgage payments, there is the down payment and a deposit. These two payments will help to secure a Stockton house for a buyer and should be saved for accordingly.
These two payments do not have to be paid at the same time. A down payment is not paid when there is an offer on a Stockton house. This will be done once the offer is finalized. With an offer, there is an earnest money deposit that may be required. This money is paid to show interest in the property and to prove that the offer is serious.
Earnest money deposit is any money that is provided to the Stockton seller when making an offer. The down payment will be paid to the lender and is a portion of the value of the Stockton house. A deposit will tell the seller that a buyer is serious about their offer while the down payment shows the lender that the buyer is financially secure.
There is no set value for a deposit. Typically, people can pay up to two percent of the purchase price of the Stockton house to the seller. The amount paid will change according to the area and how competitive the market is. If it is in a very competitive market, a higher deposit can help a buyer get their offer accepted.
While it seems like more money to the seller when securing a loan, that is not necessarily true. If anything goes wrong with a contract, a buyer may be out the money that was deposited. Depending on the circumstances of the offer falling through, that money may not be given back to the buyer.
A down payment is usually ten percent to twenty percent of a loan. The amount that is required for a down payment changes according to the lender being used and the type of loan. Some lenders will work with a buyer that does not have a large down payment or any down payment at all.
Some people prefer to sell their Stockton house before buying a new one. This gives them the funds to put a large down payment down, and can allow them to rent temporary housing until the new house is purchased.
Another option is to borrow from a retirement fund. By borrowing these funds, a buyer will have the money needed to give a down payment to a lender. Once there are excess funds from selling a Stockton house, the retirement fund can be paid back in full. Most retirement funds do not have penalties for borrowing money from them.
Knowing the many terms that come with buying a Stockton home can start to get confusing. There are a lot of fees and payments that must be made to the lender, appraisers or inspectors, and of course the seller. Many first-time Stockton property buyers find themselves confused about which terms apply to what portion of a mortgage process.