Putting 20% Down For Your Next House Can Cost You Big Time

Is it really best to put down 20% down payment and avoid private mortgage insurance (PMI)?

Her points for not putting down 20% down payment boil down to that the time it takes you to save up all the money, you will be:

Losing out on the home price appreciation over the multiple years it takes to save up that much money
Losing out on paying down the principal of the mortgage. (You would barely touch the principal of a mortgage in the first seven years, but if you end of staying in the home for longer then this does make sense).
Losing the potential gains of putting that money in some other type of investment such as stocks, bonds or your retirement account.

Date: 2007-12-13 10:10:00
Views: 1011