Is It Better to Have a 20% Down Payment When Buying a Home? – Home Buying Course Session 10

Now we have completed the offer. Let’s dive in and see if a 20% down payment truly is worth it.

Click Here to Go Back to Session 9: How to Make a Successful Offer on a Home

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Is 20% Down Better? Simply Put, Yes (But Wait)

– You will avoid mortgage insurance (PMI). PMI typically costs $30 to $70 for ever $100k loaned.

– You’ll have an immediate increase in equity

– Your monthly mortgage will be

4 Factors to Consider

-Putting down 20% will not overextend your finances.

-The down payment does not need to be used for anything else

-A lower monthly payment

-If you save 20% you will be able to afford the monthly payment

 

 

But 20% Is Not Always the Best Idea

Especially if you are leaving yourself with little in emergency savings. I encourage six months of living expenses saved up AFTER all closing costs on the mortgage. So, if you will not have that six months of savings I advise AGAINST the 20% down.

 

So, take these factors into consideration and do your best to not overextend yourself.

 

Always Moving Forward,

||| Max