Is Making A Larger Down Payment to Buy a Home a Smart Idea?

May 14,2024 | Posted By Dinorah Carmenate in re

I saw this article and felt it was very relevant and very interesting because I recently advised a couple of clients to do the same thing this article is suggesting. One person was refinancing and the other was wondering if they should get an escrow account for their mortgage or pay their taxes and insurance separately.

In this article, the author is talking about putting less money down on the purchase of a home and investing the other funds you would have used as the down payment.

What we keep forgetting is that when interest rates are high, so are the interest rates on our investments. It wasn’t too long ago when a CD would pay you maybe 1-2 percent. Today those same CD’s are paying out 4-7 percent.

This is what the article is suggesting one do. Put less money down on a house and invest the other portion of what would have been your down payment to offset the higher mortgage interest rates.

When you read this article and see the numbers, you too will decide less is more. Enjoy.

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Source: The Motley Fool