3 Home Down Payment Strategies

Dated: 02/20/2018

Views: 37

WHICH DOWN PAYMENT STRATEGY IS RIGHT FOR YOU? 

 You’ve most likely heard the rule: Save for a 20-percent down payment before you buy a home. The logic behind saving 20 percent is solid, as it shows that you have the financial discipline and stability to save for a long-term goal. It also helps you get favorable rates from lenders.

But there can actually be financial benefits to putting down a small down payment—as low as three percent—rather than parting with so much cash up front, even if you have the money available.

THE DOWNSIDE

The downsides of a small down payment are pretty well known. You’ll have to pay Private Mortgage Insurance for years, and the lower your down payment, the more you’ll pay. You’ll also be offered a lesser loan amount than borrowers who have a 20-percent down payment, which will eliminate some homes from your search.

THE UPSIDE

The national average for home appreciation is about five percent. The appreciation is independent from your home payment, so whether you put down 20 percent or three percent, the increase in equity is the same. If you’re looking at your home as an investment, putting down a smaller amount can lead to a higher return on investment, while also leaving more of your savings free for home repairs, upgrades, or other investment opportunities.

THE HAPPY MEDIUM

Of course, your home payment options aren’t binary. Most borrowers can find some common ground between the security of a traditional 20 percent and an investment-focused, small down payment. Your trusted real estate professional can provide some answers as you explore your financing options.

Who you work with matters!

Latest Blog Posts

Open Houses This Weekend In North Fort Worth 76244

There are over 50 OPEN HOUSESthis weekend in area code 76244 of North Fort Worth.Click here to view them. If you would like a private showing at another time, call me at 817-312-5621Have a

Read More

Open Houses This Weekend In Keller

There are over 40 homes that will be open for viewing in our area. Click here for a link to the open houses in the Keller area.If you would like to view them privately at another time, please

Read More

5 Things Home Sellers Need To Know

1. KNOW YOUR PAYOFFIn order to understand your financial position when selling your home, you need to have clear picture of your equity.Call your mortgage company and request a payoff amount for a

Read More

New Homes In Keller Texas

SPOTLIGHT NEW COMMUNITYTRAILS AT BEAR CREEKBuilder Our Country Homes                                  

Read More