{"id":2306,"date":"2021-12-22T15:28:18","date_gmt":"2021-12-22T15:28:18","guid":{"rendered":"https:\/\/phphouses.com\/blog\/?p=2306"},"modified":"2021-12-22T15:28:18","modified_gmt":"2021-12-22T15:28:18","slug":"perks-putting-20-home","status":"publish","type":"post","link":"https:\/\/phphouses.com\/blog\/perks-putting-20-home\/","title":{"rendered":"The Perks of Putting 20% Down on a Home"},"content":{"rendered":"
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The Perks of Putting 20% Down on a Home<\/p><\/div>\n

If you\u2019re thinking of buying a home, you\u2019re probably wondering what you need to save for your down payment. Is it 20% of the loan, or could you put down less? While there are lower down payment programs available<\/a> that allow qualified buyers to put down as little as 3.5%, it\u2019s important to understand the many perks that come with a 20% down payment.<\/p>\n

Here are four reasons why putting 20% down may be a great option if it works within your budget.<\/p>\n

1. Your Interest Rate May Be Lower<\/strong><\/h4>\n

A 20% down payment vs. a 3-5% down payment<\/a> shows your lender you\u2019re more financially stable and not a large credit risk. The more confident your lender is in your credit score and your ability to pay your loan, the lower the mortgage interest rate they\u2019ll likely be willing to give you.<\/p>\n

2. You\u2019ll End Up Paying Less for Your Home<\/strong><\/h4>\n

The larger your down payment, the smaller your loan amount will be for your mortgage. If you\u2019re able to pay 20% of the cost of your new home at the start of the transaction, you\u2019ll only pay interest on the remaining 80%. If you put down 5%, the additional 15% will be added to your loan and will accrue interest over time. This will end up costing you more over the lifetime of your home loan.<\/p>\n

3. Your Offer Will Stand Out in a Competitive Market<\/strong><\/h4>\n

In a market<\/a> where many buyers are competing for the same home, sellers often like to see offers come in with 20% or larger down payments. The seller gains the same confidence as the lender in this scenario. You are seen as a stronger buyer with financing that\u2019s more likely to be approved. Therefore, the deal will be more likely to go through.<\/p>\n

4. You Won\u2019t Have To Pay Private Mortgage Insurance (PMI)<\/strong><\/h4>\n

What is PMI? According<\/a> to Freddie Mac:<\/em><\/p>\n

\u201cFor homeowners who put less than 20% down, Private Mortgage Insurance or PMI is an added insurance policy for homeowners<\/strong> that protects the lender if you are unable to pay your mortgage.<\/em><\/p>\n

It is not the same thing as homeowner\u2019s insurance. It\u2019s a monthly fee, rolled into your mortgage payment, that\u2019s required if you make a down payment less than 20%. . . . <\/em><\/strong>Once you\u2019ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your monthly payment.\u201d<\/em><\/p><\/blockquote>\n

As mentioned earlier, if you put down less than 20% when buying a home, your lender will see your loan as having more risk. PMI helps them recover their investment in you if you\u2019re unable to pay your loan. This insurance isn\u2019t required if you\u2019re able to put down 20% or more.<\/p>\n

Many times, home sellers looking to move up to a larger or more expensive home are able to take the equity<\/a> they earn from the sale of their house to put 20% down on their next home. With the equity homeowners have today, it creates a great opportunity<\/a> to put those savings toward a larger down payment on a new home.<\/p>\n

Bottom Line<\/strong><\/h3>\n

If you\u2019re looking to buy a home, consider the benefits of 20% down versus a smaller down payment option. Let\u2019s connect so you have expert advice to help make your homeownership goals a reality.<\/p>\n

Contact us:<\/strong>
\nPHP Houses
\n142 W Lakeview Ave
\nUnit 1030
\nLake Mary, FL 32746
\nPh:\u00a0(407) 519-0719<\/span>
\nFax:\u00a0(407) 205-1951<\/span>
\nemail:\u00a0info@phphouses.com<\/p>\n

Let\u2019s Connect:<\/strong>
\nFacebook<\/a>
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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. The author does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. The author will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.<\/em><\/h5>\n","protected":false},"excerpt":{"rendered":"

If you\u2019re thinking of buying a home, you\u2019re probably wondering what you need to save for your down payment. Is it 20% of the loan, or could you put down less? Finish Reading The Perks of Putting 20% Down on a Home<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[36],"tags":[38,15,43,268,18,27,91,86,52,9,40,117,116,407,280,308,345,30,63,20,12,48,54,47,19,6,17],"_links":{"self":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/2306"}],"collection":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/comments?post=2306"}],"version-history":[{"count":1,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/2306\/revisions"}],"predecessor-version":[{"id":2308,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/2306\/revisions\/2308"}],"wp:attachment":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/media?parent=2306"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/categories?post=2306"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/tags?post=2306"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}