| A San Diego mortgage down payment is the amount | | | | withdraw. Taking money away from your long-term |
| of money the home buyer pays up-front for a new | | | | savings and/or retirement account is a big decision, so |
| home. The down payment is usually stated as a | | | | speak with your San Diego financial advisor before |
| percentage of the home's purchase price (e.g. 20%). | | | | exploring this route. |
| Does It Matter How Much I Put Down? | | | | What is Private Mortgage Insurance? |
| Most lenders ask borrowers to put down 20% of the | | | | If you simply cannot afford a 20% down payment, you |
| total purchase price of their home. If you cannot come | | | | may still be able to get the San Diego mortgage by |
| up with this much money, you can sometimes | | | | purchasing Private Mortgage Insurance (PMI). This |
| negotiate with the lender to lower the percentage of | | | | insurance makes it possible for individuals to buy a |
| your San Diego mortgage down payment. A smaller | | | | home with as little as 3% down. |
| down payment will cost you more money in the long | | | | PMI protects the lender if the borrower cannot make |
| run, because you will have to pay interest on the | | | | their monthly mortgage payments. It's kind of like a |
| money that you couldn't put down for your San Diego | | | | security deposit. If you get Private Mortgage Insurance, |
| mortgage. | | | | your monthly payments will be larger; PMI usually costs |
| What If I Don't Have Enough Money for the Down | | | | about.5% of the loan (e.g. for a $150,000 mortgage, |
| Payment? | | | | PMI will cost roughly $75 per month). |
| Since down payments are generally large sums of | | | | Some lenders require that you pay a year's worth of |
| money, many people have trouble coming up with all of | | | | Private Mortgage Insurance at the time of closing (in |
| that cash in a short period of time. Once you have | | | | this case, an extra $900). Borrowers who are current |
| exhausted all possible options for your San Diego | | | | on their mortgage payments can stop paying PMI |
| mortgage down payment, consider the following | | | | once they have around 20% equity in their house. |
| options. | | | | If you would like to avoid PMI payments, but still cannot |
| - Take out a loan against your 401(k); often you can | | | | afford a 20% down payment on your mortgage, |
| borrow as much as 50% of the total value of your | | | | speak with your San Diego financial advisor about an |
| 401(k), up to $50,000. | | | | 80/10/10 loan. With an 80/10/10 loan, you put 10% down, |
| - Withdraw funds from your traditional IRA or Roth | | | | and then take out two loans (one for 80% and one for |
| IRA (up to $10,000). Please note, however, that you | | | | 10%). |
| may have to pay income tax on the funds that you | | | | |