Buying a home is a significant financial decision that can often come with many misconceptions. One of the biggest misconceptions people have is that they need to put down 20% as a down payment when purchasing a property. While putting down 20% may seem like the norm, the reality is that it’s not always the best option, especially if you’re buying a property that costs less than 1 million.
Here’s why you shouldn’t put down 20% when buying a home:
You don’t have to
The idea that you have to put down 20% when buying a home is a myth. If you’re buying a property that costs less than 1 million, you can put down the bare minimum, even if you have the full 20%. It’s always best to consult with a mortgage specialist to understand your options.
Keep your money for other investments
By not putting down 20%, you’ll have more cash on hand. You can use that money to pay off debt, make other investments, or have it as an emergency fund. You don’t want to put all your savings into one investment.
It’s not always the best financial decision
If you put all your savings into the down payment, you may find yourself cash-strapped after closing. You’ll have to make monthly mortgage payments and have other expenses that come with homeownership. It’s always best to have some cash on hand to cover any unexpected expenses.
In conclusion, putting down 20% when buying a home isn’t always the best financial decision. If you’re buying a property that costs less than 1 million, it’s better to put down the minimum and keep your money for other investments. If you want to know more about your options when it comes to buying a home, reach out to a mortgage specialist who can help guide you through the process.
