Spending all or most of their savings on the down payment and closing costs is one of the biggest mistakes 1st-time home buyers make. Some people scrape all their money together to make the 20% down payment so they don't have to pay for mortgage insurance, but they are picking the wrong poison because they are left with no savings at all.
It's risky to deplete savings
Home buyers who put 20% or more down don't have to pay for mortgage insurance when getting a conventional mortgage. That's usually translated into substantial savings on the monthly mortgage payment. But it's not worth the risk of living on the edge.
I'd take paying for mortgage insurance any day over not having money for rainy days. Everyone -- especially homeowners -- needs to have a rainy-day fund."
Need a mortgage but you don't have much of a down payment? Call me today for information on a reputable lender.
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