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Worth putting 20% down?

by miyop283 from Canaan, Indiana. Dec 1st 2020 Reply


Scott Swinford (scott@nwiloanguy.com)
#16 ranked lender in Indiana - 22 contributions

Short answer: it depends on the type of loan and your credit scores.Slightly longer answer: If you need to put that much down to qualify AND you don't have any other debts that can be paid off such as high-interest rate credit cards, then maybe. Since each $1,000 more or less you put down changes the average payment by $5 to $6 a month, it's sometimes better to have an extra $5,000 (or $10,000 or $20,000) in your pocket for other expenses. Even investing the money you were going to put down should yield you more than the ridiculously low rates on home loans currently.

Dec 1st 2020
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Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,300 contributions

Yes and no. If all you have to put down is 5%, in most markets, prices will climb faster than most people can save up additional funds for a larger down payment, If you have the money to put down 20% and it doesn't leave you with empty pockets, you generally get better pricing and a lower payment by putting 20% down. We usually see hits to pricing for each 5% increase in the LTV (loan-to-value ratio). Also, with less than 20% down, the mortgage insurance factor also increases the higher the loan-to-value goes, increasing your payment. The best way to determine which scenario makes the most sense would be to connect with a licensed Mortgage Broker so an analysis of your options can be created showing you the pros and cons of each as it relates to your situation. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ At NEXA, we've got you covered. We are licensed in all states except MA and NY and we're pending approval in VA. ~ www.ApplyYes.com 480-889-9000.

Dec 1st 2020
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