The Down Payment Split is a key element of Steadworth's Home Wealth Share Plans, as it determines the amount of money you contribute towards the down payment on your home. Understanding the Down Payment Split and its implications is crucial for making informed decisions about your financial commitment and monthly mortgage payments.
What is the Down Payment Split?
The Down Payment Split refers to the percentage of the home's purchase price that you contribute towards the down payment. Steadworth will contribute the remaining percentage, bringing the total down payment to 20%. This allows you to purchase a home with a lower upfront investment and potentially qualify for a larger loan amount.
Available Down Payment Split Options
Steadworth offers two Down Payment Split options:
5% Down Payment Split: You contribute 5% of the purchase price towards the down payment, and Steadworth contributes the remaining 15%.
10% Down Payment Split: You contribute 10% of the purchase price, and Steadworth contributes the remaining 10%.
Impact of the Down Payment Split
The Down Payment Split you choose has several implications:
Multiplier: The Multiplier used to calculate Steadworth's share of the appreciation. This is higher for lower Down Payment Splits, reflecting the increased investment made by Steadworth.
Wealth Share Proceeds: The Wealth Share Proceeds are the portion of the home's appreciation that is shared between you and Steadworth. With a lower Down Payment Split, Steadworth contributes more to the down payment and therefore receives a larger share of the appreciation.
Upfront Cost: A higher Down Payment Split requires a larger upfront investment from you, even though the total down payment remains at 20% regardless of the split.
Choosing the Right Down Payment Split:
The best Down Payment Split for you will depend on your individual financial situation and preferences. If you have limited savings but want to maximize potential appreciation gains, a lower Down Payment Split may be suitable. However, if you have more savings and prefer lower monthly mortgage payments, a higher Down Payment Split may be a better option.
By understanding the Down Payment Split and its implications, you can make informed decisions about your financial commitment to the Home Wealth Share program and choose the plan that best aligns with your financial goals and homeownership aspirations.