💡 The Benefits of Making a Bigger Down Payment

Use Your Home Equity for a Bigger Down Payment

When buying your next home, one major advantage as a current homeowner is the equity you’ve built up in your existing property. Once you sell, that equity can be applied toward a bigger down payment on your new home. With home equity at record highs, the average down payment has also increased, creating opportunities for buyers.

While making a bigger down payment isn’t required, many homeowners opt for it because of the benefits. Here’s why this strategy can be a smart move:

You’ll Borrow Less and Save More Over Time
First and foremost, a bigger down payment means a smaller loan. This results in less interest paid over the life of the mortgage, potentially saving you thousands of dollars.

You Could Secure a Lower Mortgage Rate
Additionally, lenders often offer better mortgage rates to those who contribute more upfront. This can translate to long-term savings and lower overall costs.

Your Monthly Payments Could Be Lower
Moreover, with a smaller loan balance thanks to a bigger down payment, your monthly payments are reduced, making homeownership more budget-friendly and manageable.

You Can Skip Private Mortgage Insurance (PMI)
Finally, if your bigger down payment is at least 20%, you can avoid PMI. This lowers your monthly expenses and can lead to significant savings over time.

Ready to discuss how using your home equity and making a bigger down payment can benefit you? Reach out for personalized advice.