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Debt question

Penny Pincher

Penny Pincher

New member
When saving up for the down payment to buy a house, FHA wants a 3.5% minimum down payment. My father told me "back in the day" down payments used to be 10%. Obviously our monthly payment would be less if have a higher down payment, but what about opportunity costs lost by continuing to pay for where we are now. I've seen plenty of mortgage amortization calculators on the Internet, but nothing that factors this in. Does anyone know of such a calculator? My Google-foo isn't that great!
 
While I don't have a link to a calculator like that, I think you're better off saving for a larger down payment so long as you have a fast saving schedule and its not going to take years and years. Remember, mortgages have PMI charges if your equity is less than 20%. That money basically goes to waste. So if you have a house to sell now and its equity will get you to 20% if you added it to cash you have set aside, then buy sooner rather than later. Otherwise I'd shoot for 10% later.
 
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