Benefits of Putting 20% Down on a Home

If you haven’t heard by now, if you’re thinking of buying a home this year now is the time, though you may be wondering how much money you may need to come up with a down payment? Most people you ask will tell you that it’s 20% of the loan to secure a mortgage and they aren’t wrong though there are plenty of lower down payment options available for qualified buyers.

There are programs available that can allow you as little as 3.5% or those who qualify for a VA loan which may not need a down payment and while those are great options and may save money upfront, we are here to explain to you why it’s important to put 20% down if you can afford it!

1. Low interest Rates. A 20% down payment shows your lender that you are more financially stable and therefor are not a large credit risk. The more confident your lender is the lower your interest will be!
2. You’ll end up paying less for your home in the long run. This one is simple, the larger your down payment the smaller your loan amount will be.
3. Your offer will stand out over the competition. If you’re competing for a home where there is multiple offers, sellers are likely to choose the one with a larger down payment! Why? Because it shows that you are a stronger buyer and are more likely to be approved therefor making the deal as smooth for the sellers as possible.

So if you’re thinking of buying a home and already have a good amount in your savings, reach out to a professional who can walk you step by step through the process and who will help you make the best decisions for your unique situation.