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Is it good to put more than 20% in a home we are buying ?

22 Jul

Is it good to put more than 20% in a home we are buying ?
Lets say around 25-30% ?

 
3 Comments

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  1. Melissa F

    July 22, 2010 at 4:05 pm

    If you mean for a down payment than sure. It will drop the amount you will need to borrow which will make your monthly payment lower

     

  2. garciasgirl9

    July 22, 2010 at 4:48 pm

    Yes, unless after putting all of that money down you have no savings. When buying a home you should have at least 6 months of living expenses saved up, and in the current economy, probably more. It is all relative to your specific situation.

     

  3. Paul in San Diego

    July 22, 2010 at 5:18 pm

    Yes, as long as you don’t think you’re going to need/use that money for something else in the future. If you do foresee needing the extra cash (like to furnish or renovate the home, or just to have a buffer in your checking account), then hang onto it. The only way you’ll be able to get it back later is to take out a home equity loan. And, if the value of the home drops before you try to get that loan, the funds might not be available at all without going over an 80% loan-to-value (higher interest rates and less available to take out).

    However, the benefits of putting more down are that you pay less per month, you might get a slightly better interest rate, and you’ll pay less in loan origination fees (points), because that would be based on a smaller loan amount. Then again, the flip side of that is you have less interest and loan points to deduct on your income taxes.