Your Down Payment
Accumulating a Down Payment
Before setting out to purchase a home, you should determine how much you will plan to put down. This covers the advantages of down payments of at least 20% of the purchase price as well as PMI (Private Mortgage Insurance).
Almost all lenders today require you to purchase private mortgage insurance (PMI) if you put down less than 20 percent of the purchase price when you buy. PMI typically adds several hundred dollars annually to the cost of your loan.
Investing the Down Payment
Most prospective homebuyers aren't in a position to take many risks with their down-payment money. Depending on how long you plan to wait before buying your home, you should consider these options for investing your down payment.
Smaller Down Payments
Especially if you're just starting to save, 20 percent of a property's purchase price as a down payment plus closing costs can seem like a financial mountain. Here are some down payment options to consider.