Where do you go for your downpayment? Retirement funds are one source but only if you are very young, let’s say 20’s to 30’s. From my experience, I personally feel it is a mistake to take retirement funds to make a downpayment. Much better to use an inheritance, save yourself or win a lottery (laugh!). Some borrowers have taken a second mortgage to fund their downpayment. This can really put a lot of stress on your budget. However, if you are serious about owning, you may be willing to struggle for a while. Providing you have a fixed rate mortgage, as your income grows, your monthly mortgage payments become more affordable since they are fixed.

Something to remember as the loan numbers are put together is that the more downpayment, the smaller the mortgage loan, resulting in smaller monthly payments.

Note: If you are refinancing a mortgage loan, instead of another 30 year term, you can negotiate with the lending institution for the number of years left on your original loan. Example: You are into the 5th year of your mortgage loan and want to refinance. You can request a refinance for the term of 25 years..ie, 30 years minus 5 years. This is just one of the choices you have.

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