Question:

Should I make a large down payment?

Answer:

Well, it depends. A large down payment of 20% qualifies you for better rates and lower monthly payment, as you are not going to pay private mortgage insurance. If you want to make over 20% down payment, you probably don't have higher return investment opportunities at hand.

Starting with a large down payment automatically builds up equity for you. In the case house values go down, you will not find yourself owing more than your house costs.

If you do have the funds for a large down payment, but you are thinking of how much you should actually put towards it, consider no-down-payment loans. They will carry higher rate. You would want to compare the cost of a no-money-down loan to the cost of putting 20% and avoid PMI, or a second mortgage.

Statistics show that more than 40% of first time home buyers prefer taking a no down payment mortgage rather than put a large down payment. Well, perhaps they didn't have it. Also, down payment assistance sources account for helping more than 600,000 households achieve homeownership and avoid large down payment since they came into existence.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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