HOW MUCH SHOULD YOU PUT DOWN TO BUY A HOME

HOW MUCH SHOULD YOU PUT DOWN TO BUY A HOME

Looking to buy soon but not sure you have the down payment?

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

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.

Looking to buy or sell, call Jill today. Jill Calderone, Exit Midlands Realty, 803-606-4491, jill@scexit.com. Website jill.scexit.com.  Text "Jill" to 803-753-4961 for my mobile app and to view MLS listings.




Jill Calderone is a real estate professional with EXIT Midlands Realty. Jill specializes in assisting buyers and sellers throughout the Columbia Midlands, ChapinNewberry, Lake MurrayLexingtonIrmo and the surrounding areas. She can be reached on her cell phone at 803-606-4491. 



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Phone: 803-606-4491
Dated: February 14th 2018
Views: 143
About Jill: Jill is originally from Charlotte, N.C., and graduated from North Carolina State University with a B...

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EXIT Midlands Realty
200 Clark St PO Box 807
Chapin, SC
803-753-4961
803-345-6126