Ben Asks… I’ve heard it best to save a large down payment before I buy a house. Is that good advice?

 

Yes, it is. However you don’t have to have a large down payment currently to buy a house. It just makes it more advantageous if you do. There are many benefits to having a large down payment.

  1. You will get lower financing rates and better terms as you will be seen as a lower risk borrower
  2. Your mortgage payment will be lower and potentially more manageable
  3. If you have at least a 20% down payment based on the value of the home you will avoid private mortgage insurance premiums – which could save you thousands over the years.
  4. With a large down payment you won’t run quite as high a risk to be in a negative equity position in the future
  5. A large down payment may be able to help you ride of financial crises like job loss or illness.  Since you are not at a maximum debt load and you could potentially borrow the equity of the home if you get into a real emergency

The most solid investment you can make is a large down payment for your home. Take the time to budget and save the money and it can be worth thousands in savings to you over the years.

Meet Cheryl!

About Cheryl

As a successful business owner and community leader, Cheryl Braunschweiger is known and respected for getting things done with a degree of skill and enthusiasm that bring out the best in those around her - colleagues, clients and friends. The name of her business, ALMC Mortgage, reflects Cheryl's philosophy and personality. She says it stands for All Loans Must Close –a reflection of her determination to do whatever it takes to serve her clients. Cheryl has been in the mortgage lending business for 20 years. Read More About Cheryl
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