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