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20% Down???

Homey don't play that

Do you need 20% down to buy a home?  Lord no!

Delaying your home purchase to save 20% is not always wise.

You might miss out!  Property values increasing, the potential to grab a deal or even interest rates increasing.

Minimum down payments are quite manageable.

Conventional = 5% Down

FHA = 3.5% Down

VA = 0 Down

USDA = 0 Down

With 20% down on a conventional Mortgage, you will avoid monthly Private Mortgage Insurance( PMI). Which is fine & dandy. But the PMI is temporary and isn’t even that expensive. Certainly not enough to delay your home buying plans.

PMI is $40-$80 per month per $100K borrowed. Exact amounts will hinge on loan program, credit score and amount of down payment.

Example from a conversation today…

First spoke with this client last year. She delayed buying a home for saving 20%.

Over the course of the past 12 months interest rates have gone up about .5%.

We worked the #’s with no PMI. The monthly payments are very close to the same, had she bought last year and simply put 15% down. Instead she WAITED for 20%... that $60 per month she saved by not having PMI is quickly gobbled up in the higher interest rate.

PMI is not the end of the world. On Conventional Mortgages, its temporary until 20% equity is established.

Don’t wait to buy just on account of paying PMI.  Its just a pesky band aid.