Should You Put 20% Down?

There are two big misconceptions when it comes to buying a home with 20% down. The first is that you must put 20% down. That is nowhere ear true even if you aren't a first time homebuyer. This notion probably originated from the idea that when you do put 20% down you don't pay any mortgage insurance and so someone just figured it was not a good idea to buy until then. Or it could've been because at some point in time that was the minimum requirement. Or maybe it was because it led to a more favorable payment. No one really knows and it really doesn't matter. The point here is you do not need to put 20% down. For instance, there are programs for first time homebuyers with a down payment requirement as little as 3% down. And if you are not a first time homebuyer the numbers are 5% down. And even if you have a more complicated or risky financial profile the minimum down payment is still just 10%! So that handles that! 

Now, the second this that isn't true regarding the 20% down payment is that you should put 20% down. Why is this? Well, when you put 20% down you are putting an additional 17% or maybe 15% down that you aren't technically required to put down which could mean another $50k or $150k and are usually only saving about $500/ month! Don't get me wrong that is a lot of money but wouldn't you rather have $150k cash in your bank account and pay the extra $500? This is a general scenario but more often than not that is how the numbers look like.