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Mortgage Down Payments: Bigger is Better

how much should i put downSaving up a down payment of twenty percent is no easy feat.  In fact, most first time homebuyers opt for FHA loans, where the down payment requirement can be as low as 3.5%.  However, it’s always best to put down the largest down payment possible.

Why?  Here are a few reasons:

You’ll have a lower interest rate.

The lower your loan-to-value ratio is, the lower your interest rate will be because you represent less of a risk to lenders.  The bigger down payment you have, the lower your loan-to-value ratio is.  Therefore, you’ll have a lower interest rate if you put down a bigger down payment.

You’ll save money in the long run.

If you can save up more money for a down payment, you’ll end up paying less money because that’s a lesser amount of a loan that you will have to pay interest on eventually.  Even adding an extra $5,000 could end up saving you thousands of dollars in the long run.

You’ll be protected with a low appraisal.


If you put forth a big down payment, there will be a big cushion between the home’s value and the about of the loan.  If the appraisal gives a value that’s lower than expected, you can be protected from losing the home.

Today's Low Rates

30 Year Fixed 3.875% 3.93%
15 Year Fixed 3% 3.06%
5/1 Arm 3.5% 3.672%
All rates shown with 0 points

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