This is a really common question I get during initial consultations with clients, and it is a very hard one to answer. In a perfect world, you would put down at least 20% and that would create the perfect payment that you are comfortable with. In reality, that’s not usually the case; sometimes it makes sense to put down more to bring the monthly payment down, and other times it makes sense to put down less to keep some cash in reserves.

What I will say is that many clients who plan to make large down payments often rethink it after considering some alternatives. A client who just purchased a home in Northville, for instance, decided to invest a large portion of his down payment rather than put it into the home. The reason this worked for him right now is because we are in such an incredible low rate environment; people can borrow at 3 or 4 percent. Even if he invested conservatively, he could earn more than he was paying in interest on that money.

If your concern is that you need to put less than 20% down, that also can be fine depending upon the situation. If you want to keep some cash in reserves, or if you simply do not have 20% to put down, there are many loan programs available to you.

At the end of the day, the right down payment is the one you are comfortable making. But if you need some guidance, talk to a qualified mortgage professional about it.

If you have any questions about how much to put down on your new home, please contact me and I will help you figure out what works best for you. Should you have anything to add about how much to put down on a house, please leave a comment.