Pros & cons of putting down a bigger down payment

Pros & cons of putting down a bigger down payment
One of the biggest myths of buying a home is that a larger down payment is always better, but that is not necessarily true. It really depends on the person/family and their current financial situation. Here are a few disadvantages of a large down payment:

❌ Longer time to enter the market. The months or years spent saving for a large down payment can delay your chance at homeownership. This means paying rent for that extra time, and if housing prices are rising rapidly in your area, it could result in prices getting away from you.

❌ Less short-term flexibility. Cutting savings to the bone to increase your down payment can backfire, since buying a new home often means dealing with unexpected expenses.

❌ Interference with investments or retirement saving. Money you accumulate for a down payment can take away from money you put toward other goals. For example, you may have to cash in some long-term investments to come up with a down payment, or putting aside money for a home might restrict your retirement or university savings.

❌ Benefits take a while to add up. Many of the benefits of a large down payment reward you more in the long-term than in the short-term, which may not be much use to you if you don't plan to stay in the house long.

Do you have questions? I'd be happy to answer them for you! Give me a call anytime!
Gary 'Mr Action' Fayerman
(403) 620-2800


No comments

Post Your Comment:

Your email will not be published
Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS®System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.