3 Major Benefits to put 20% Down Payment

3 Major Benefits to put 20% Down Payment

If you are planning to buy your home in 2022, there are 3 major benefits of putting 20% or more down payment. Now, you can get a loan as low as 3 percent or 3.5 percent down payment. Or some banks, sometimes they do an 80-20 loan with zero down. VA has loans with zero down payment. But when you put 20% down payment, you have three major benefits.

Number one is your negotiation power. 

In this market right now when sellers are getting multiple offers, or maybe in the future when sellers will not get that many offers, still you have more negotiation power with 20% down payment because the qualification is much stronger compared to buyers are putting lower down payment.

Number two is the interest rate. You get a better interest rate when you put 20% or more down payment because the lender has less risk so they can give you a better interest rate. 

And number three, this is major, whenever you put a 20% or more down payment, you can get rid of the mortgage insurance, PMI. That's approximately $250 to $300 a month or it could be more you can get rid of. You don't have to pay every month because lender does not need a mortgage insurance to protect the loan because you have enough skin in the game so you don't have to pay that premium every single month that will keep your mortgage payment, the monthly payment low.

So these are the three reasons to consider if you have money or if you're planning to save up some more money or you are selling a home and buying a new home. These are the three major reasons you should put 20% down payment.

Hopefully this video will help you in buying your next home. Give me a call. My name is Shawn Bhakta from Remax Presidential. Happy to help.