Essential Things You Must Know About Down Payment

You’ve probably shortlisted a recent sell listing of a house from a reputable company that says “we buy houses in NJ” and decided to go for it. While buying a home is a highly exciting process, there are lots of things that you need to take care of to make the entire process a smooth one. Among many other things, arranging for the down payment to finalize the deal is the first and most important thing you need to consider.

This post would help you gain a clear idea of down payment no matter if you’re buying the house from a company with the tagline “sell my house fast NJ” or from one that’s a leading name in “we buy houses in NJ”.

Understanding a Down Payment

In simple words, a down payment is a percentage of the purchase price of the home that you’ll pay during the sales transaction. For instance, if your home’s purchase price is $200,000 and you plan to make a down payment of 20%, you’ll initially have to put $40,000 down and the rest you’ll borrow from a mortgage lender. Making a down payment also increases your credibility as a serious homebuyer to your mortgage lender.

How to Arrange Funds for a Down Payment?

Even if you’re buying the house from a top-tier “we buy houses in NJ” company that has joined hands with some reputable mortgage lenders, you must have the funds to make the down payment and take care of other closing costs. So, the biggest question stands as how you can arrange the money.

If you’ve got generous relatives who’ll send you gift money to make the down payment, you’re lucky enough. However, there’re factors you need to consider when using gift money so be sure to check them out. But if you don’t, you need to arrange the funds on your own. While this is certainly an uphill task to accumulate such a large amount, there’re ways to make it a little easier.

You can explore these strategies.

  • Postponing vacations and major discretionary purchases
  • Selling unneeded/unused items
  • Automating deposits into a fund that you’ll only use for making the down payment
  • Starting a side hustle to earn extra

How Much Should You Put Down As Down Payment?

While the usual average down payment amount is 20% of the purchase price of a house, a recent survey from the National Association of REALTORS® that it comes down to 6% for first-time homebuyers. However, the amount you’d need to pay as the down payment depends on various factors including your DTI or debt-to-income ratio, specific requirements of your lender, your credit score, etc.

Closing Thoughts

It’s important to understand that taking out a smaller mortgage loan means making a larger down payment. Also, if you’ve got a marginal credit score and lots of debt, you may need to make a bigger down payment even if you’re buying the house from a leading “sell my house fast NJ” company. Keeping all these things in mind, planning ahead and starting saving up for making a standard down payment seem to be a prudent decision.


Download our
FREE Market Guide

  • This field is for validation purposes and should be left unchanged.

See Our Google Reviews

Estefania Castaneda
Estefania Castaneda
17:24 04 Sep 21
Extremely pleasant, attentive to all my needs always. It was a pleasure renting an apartment from Ken.
Vichai Soysouvanh
Vichai Soysouvanh
14:17 03 Sep 21
Can't say enough about Ken and his team. This was the most seamless sale I made. I didn't have to deal with all the... nonsense that comes with selling your home. They bought my house as is, I didn't have to declutter and pay a broker commission. All in all great experience, will do business more
Niki Keser
Niki Keser
17:46 06 Aug 21
I had a wonderful experience renting one of their properties for 7 months. The apartment was beautifully remodeled and... Ken and his team were always responsive to any needs. I would recommend to anyone looking to sell or more
15:13 02 Aug 21
Ken and his team were professionals ,they promised and they delivered or anything
Alfredo Garcia
Alfredo Garcia
03:20 17 Jun 21
Selling my property too Ken was the best thing I did. Although I was skeptical at first I soon found out how... professional he was. Even though my closing contract was not standard because of the pendemic situation. He followed through on time with all the contract terms as promised. Thank you Ken for your professionalism.Alfredo Gread more
Vishrut Patel
Vishrut Patel
23:27 19 May 21
Ken was referred to us by someone who had sold their home thru Ken last year. From the first meeting to the last... transaction, Ken and his team were professional, efficient, easy to work with, and above all.... caring. Each seller's situation is different, and Ken truly understands that. We were treated with respect each time.Since we were in a time crunch situation, selling our home with a cash offer from Ken was the best decision we could have made. We were perfectly okay with getting slightly less money for our home as compared to selling it via an agent. But if you consider the money saved on agent commissions (both buyers and sellers), closing costs, repair costs, attorney fees, and most important of all... time and headache, you can't beat the option to sell your home with a guaranteed cash offer from a reputable buyer like Ken.My wife and I were very pleased with our experience with Ken. If you are in the market to sell your home fast for a cash offer, I highly recommend giving Ken a call!Best of luck!Vishread more
Christopher Martino
Christopher Martino
14:19 10 Mar 21
Ken and his team were great. They were easy to work with, professional, and responsive. If you are thinking of selling... your home they offer a super easy more
Chelsea Grant
Chelsea Grant
15:36 03 Jan 21
I am a travel nurse and stayed in a town home for 3 months... It was exactly as described and any issue that came about... was handled within a few hours - I would definitely recommend and I would definitely stay again!read more
Aaron Zachko
Aaron Zachko
12:41 14 Aug 20
Amazing experience! Ken was upfront, quick and got the deal done in no time. Having done a number of real estate... transactions this was by far the easiest and smoothest. I would unconditionally recommend him to anyone looking for an easy, quick and fair more
Joseph Tricarico
Joseph Tricarico
19:10 26 Mar 20
Ken is a very professional individual from start to finish. As promised, he gave me a fair deal on my one of my... properties that was in rough shape. He was knowledgeable and responsive to my requests and as promised we didn't need to waste time with inspections and appraisals and we closed quickly. He made it painless as possible by having his crew handle the clean up. This was truly a quick and easy process but a professional individual. Thanks Ken!read more
Next Reviews

Site Map
Privacy Policy

Click for the BBB Business Review of Cash Buyer New Jersey