Well, you don’t…but there are some financial differences when you compare 20% or more as a down payment for real estate to 19.99% or less.

#1 – If you do have 20% or more in reserve, great! This means you can save money, but there is no law that says you must have this amount of savings. You may be able to get access to things that a buyer with a lower down payment cannot, or you just have a bigger bank account. But, you DO NOT have to put 20% down…it’s your money.

#2 – PMI = Private Mortgage Insurance. MIP = Mortgage Insurance Premium. Everyone’s heard about this “insurance” you must pay if your down payment isn’t 20% or more. You have two options here; have more cash and don’t pay monthly, or keep your cash and pay monthly. It’s your cash and your monthly payment – let’s make it the way you want it.

#3 – “The Deal” appears more solid if there is a larger down payment noted on a “pre-approval letter”. One might assume because you borrow less, you’re in better financial shape and have a better chance at closing than a competing bid that has more financing in play.

Bottom line: Consult me before you do anything with real estate.

You have options and a true professional looking out for you.

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