11/03/2021
Share with me in the comments if you bought or will wait until you have a 20% down payment or if you would buy a property with 5-10% down payment? And why?
One of the biggest proponents I often hear for waiting until you have saved a 20% down payment is because you won’t have to pay mortgage insurance. While this is true I don’t necessarily think it’s a good reason to wait.
Chances are, the time it will take for you to save a 20% down payment housing prices would have increased to more than you would have paid in mortgage insurance.
For example if the purchase price of a property is $500,000 the mortgage insurance payable over the total amortization period (25 years) would be around $19,000.
So let’s say it takes you 3-5 years to save your 20% down payment, and for a house that costs $500,000 (20% down payment would be $100,000) then chances are housing prices would have increased by more than the $19,000 you would have paid in mortgage insurance.
So would it have worth the wait? Drop your responses in the comments!
Disclaimer: this is not financial advice please contact a mortgage broker or financial advisor for personalized advice based on your financial situation.
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