Living in Contra Costa County: How Much Down Payment on put on a Home ? As Much as Possible?

How Much Down Payment on put on a Home ? As Much as Possible?

Should You Really Put as much Money Down as you can on a Home Purchase? – Buying a Home Part 3

There are a lot of great Home Loan Programs, even some programs for Zero Down PaHow much Down Paymentyment Home Loans. Yes you can Buy a Home with No Money Down. Even if you do not qualify for a Zero Down Home Loan, most people can get an FHA Loan with 3.5%. There are lots of Home Loan Programs.

There are lots of Home Buyers that can afford to pay cash for a home; and many that can put down a traditional 20% or more on a Home Loan.

But should you put as much money down as you can? If you can pay cash should you? Or is there a better way to do it? Keep in mind that in general if you put less than 20% down you will have a slightly higher loan rate or mortgage insurance that will make the cost of the loan a little higher. Here are some things to consider when deciding how much money to put down (of even get a loan):

  1. Can you afford the higher monthly payment when you put less down.

  2. If you put all (or a good hunk) of your money into the down payment do you have a reserve left in the event of job loss or disability that might keep you from working; so you can pay your mortgage. Do you have a reserve left for other expenses.

  3. Right now borrowing money is cheap. If you borrow (or borrow more than you have to) can you make more money by investing what you do not use for the down payment. This is especially true when you consider that the mortgage interest is something you can right off on your taxes.

  4. The more money you put down the easier and quicker your loan will be processed (in general).

  5. When you submit an offer on a home, the more money you are coming in with a down payment (or better yet – All Cash) makes your offer look more attractive to the sellers as you look like a more solid buyer.

  6. This last reason for putting down a small down payment is kind of twisted, but sadly practical. I doubt we are going to have any down turn in the market soon, and I really doubt it will be like the one we just came through if it does come; but the less you put down the less you loose. Yep if you are upside down on your home and have to walk away (or loose to foreclosure) the less down payment you put into it the less you loose.

Now every client is different. Every persons situation is different. However, in general, if you have the money and will still have a good reserve, I recommend going with 20% down. No more and no less, for the reasons above. Now if you do not need a Tax Deduction and want a paid for home or low mortgage due to your situation go ahead and put more down or pay cash. If you can put more down or pay cash, but don't have to, maybe you should leverage your money and buy an investment property in addition to your primary residence.

For those of you that cannot afford to put 20% down (or would have to clean out the piggy bank to do so). Buy with as little money out of pocket as possible. Save your cash.

Yes it is risky to buy a home without a big cash reserve, but it is riskier not to buy a home. Does a home loan cost more without a big down payment? Yes it does, but it will probably cost you more to wait? Read this blog post I wrote some time ago on the Advantages of Home Ownership. If you should ever run into financial Hardship you are probably better off in your own home than a rented property.

Talk to a lender and Realtor about the loan programs available to you and the current housing market and then make the best decision for you.

Let Home Point Real Estate Point you in the right direction. Located in Brentwood Ca Home Point Real Estate provides service to the East Contra Costa County Communities of Brentwood, Oakley, Discovery Bay, Antioch, Pittsburg and beyond. Give us call at 925-260-4321 about Buying a Home, Selling a Home, or Real Estate Investing

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By Gene Riemenschneider

Broker and Owner

Home Point Real Estate  - 925-260-4321 - Turning Houses into Homes

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Gene Riemenschneider
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Comment balloon 7 commentsGene Riemenschneider • February 19 2016 09:35AM


Need to show some good faith here..$2,000 down on a $500,000 doesn't show much ....


Posted by Ronald DiLalla, No. Orange Cty Real Estate (Century 21 Discovery DRE 01813824) over 3 years ago

Hi Gene... this is an excellent recap on the pros and cons of how much money to put down on a home... and easy to understand by even the most inexperienced home buyer.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Residential Brokerage ) over 3 years ago

Hi Gene, great advice for buyers, especially those who may not be that savvy in the process.

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) over 3 years ago

Good morning Gene. Outstanding post, it should be featured. Many times the public just doesn't know and it's our jobs to coach them to what is best for them.

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) over 3 years ago

Gene, excellent post for buyers to understand how much money to put down and the reasons. Each buyer's situation is different and some, if not most, will put down as little as possible.

Posted by Rebecca Gaujot, Realtor®, Lewisburg WV, the go to agent for all real estate (Vision Quest Realty) over 3 years ago


A big deposit gets the sellers attention..

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) over 3 years ago

Gene Riemenschneider - You have outlined a great plan for buyers to consider with pros and cons to take into consideration. Buyers would be smart to work with you!

Posted by Patricia Feager, MBA, CRS, GRI,MRP, Selling Homes Changing Lives (DFW FINE PROPERTIES) over 3 years ago