Down Payments- Let's Pretend They Exist
Not really sure who this article in Motley Fool is targeting... being the derth of down payments made in the last few years due to the exotic financing being used... many buyers in the biggest bubble areas made no downpayments and could only qualify to get into the game with risky loans. Many have little to no skin in the game. So this article is hardly news....
"What percentage of what you're paying for a house should be your down payment? There's no single best amount, and it will likely vary according to your situation. Mortgage lenders typically like to have you pay 20% or more down (which means you're financing only 80% of your purchase price), but some special loan plans can get that down payment into the low single digits."
"By using private mortgage insurance, you can also swing a down payment that's less than 20% of your home's purchase price. In addition, there are some programs available that offer low-cost loans with very small down payments."
"If you're fairly flush with funds at the moment, and you work in a profession where you never know exactly how much you'll make in any given year, you might consider paying more than 20% as a down payment. The higher the down payment you make, the lower your mortgage loan and, therefore, the lower your monthly payments will be."
"Of course, it's also reasonable to pay only as much as you need to and invest the rest. It's up to you. Just remember that you need to be comfortable with the amount you're putting down and with your monthly payments."