NEW YORK – April 25, 2019 – Maximizing a home down payment can make sense: The bigger the down payment, the lower the monthly mortgage bill and the better the chance of building equity more quickly.
But putting too much down could leave you without enough cash for home maintenance – or anything else.
Pinpointing the right amount involves balancing the advantages of boosting the down payment against the need to hold back money for urgent upgrades, life’s emergencies, and having some fun with your new home.
“There’s really no one-size-fits-all solution,” says Jason Speciner, a certified financial planner in Fort Collins, Colorado.
The effect of a higher down payment
Calculating how different down payments would affect a monthly mortgage payment is eye-opening. Some lenders require only 3 percent down for conventional home loans, which makes getting in the door easier but means assuming more debt than with higher down payments.
Source: Copyright 2019 The Associated Press; Barbara Marquand is a writer at NerdWallet. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.