Down Payment is often confused with closing costs and earnest money deposit (EMD).
Earnest Money Deposit (EMD) is when you are offering money with a contract to show that you are going to go through with the contract. Â The Earnest Money Deposit is credited towards the down payment or closing costs when you close on the home. Â The Earnest Money Deposit can be forfeited when you are outside of your due diligency or contingency period and you back out of the contract and fail to close.
A down payment is something that is related to your loan. Â A down payment on a Las Vegas home could be anywhere from 3.5% (three and a half percent) of the purchase price for an FHA loan to 40% (forty percent) of the purchase price for an investor loan. Â Technically if you are a Veteran you may qualify for VA financing for 0% (zero percent) down. Â No one can tell you what you are qualified for unless you go through the full pre-approval process with a lender.
It all depends on what loan or mortgage product you qualify for, your credit & employment history and how you plan to occupy the property. Â Again, you must talk with a mortgage professional so they can help you figure out which mortgage products you qualify for before you know exactly what you will need to bring in for your down payment at the closing table.
There may be an instance where you may have to pay more than your lender requires and that would be if your appraisal comes in low. Â If your appraisal comes in lower than the contracted purchase price of the home and you have exhausted other attempts with the sellers to get a lower purchase price to match the low appraisal, then you can choose to leave the escrow (provided you have an appraisal contingency) or pay the difference between the appraised price and the contracted purchase price.
FYI= the wide amounts I gave you for down payments are subject to change in the future – this is another compelling reason why it is wise to speak with a mortgage professional now if you are considering a purchase!
You can read more in depth what Earnest Money Deposit is right here.
You can read more in depth what Closing Costs are right here.
Latest posts by Renee Burrows (see all)
- Home Is Possible – Nevada Home Buyer Grant Zero Down! - December 9, 2016
- Home Inspection Repair Response – Dos & Don’ts - September 17, 2015
- 2 Simple Ways to Save Money NOW On Your Electric Bill - October 7, 2014
- Ikea’s Famous Cinnamon Rolls, Swedish Meatballs, Gadgets and Furniture Coming to Las Vegas - July 17, 2014
- Homes Still Appreciating in Las Vegas June 2014 - July 17, 2014