As title said, looking into buying a home, wondering about the pros and cons of both, should I utilize the 0 down payment, or liquidate some other assests to put down the biggest down payment possible?
0 down payment VS biggest down payment possible
byu/ElementGlich inMilitaryFinance
Posted by ElementGlich
1 Comment
Cash on hand is important. Once you sink money into a down payment, you can’t get it back unless you sell or refinance, both of which come with costs and depend on external market conditions you can’t control.
If you’re worried about paying more interest with a higher loan amount, that’s valid, but you can invest the cash you don’t make for the down payment and then supplement your mortgage payments with that cash while it’s earning for you. That mitigates the higher interest that comes with the higher loan amount, while still giving you easy access to the money if you have an emergency or a lucrative investment opportunity.
Particularly if you’re in a VA loan and ESPECIALY if you are exempt from the VA Funding Fee, I think making a low to moderate down payment is far better than making a big down payment. The flexibility to control your cash and have easy access to it is worth a premium.