Is Low Mortgage Down Payment a Good Idea?

Home mortgage interest rates remain at an all-time low. If you’re in the market for a house, it’s a great time to buy, particularly if you are a first-time home buyer.

With interest rates so low, it’s tempting to make a small down payment and invest the extra cash. However, this may not be the best idea. Although most people have good intentions, only a few are skilled investors, and will give the necessary attention to their investments. Or they may be taken in by a “sure winner” and end up losing their shirt. Regardless, it’s not easy to find an investment these days that returns a consistently good rate. Worse yet, with extra cash in your pocket, you may not be able to resist spending it instead.

The more you put down, the less your monthly payment will be. In addition, your insurance costs, and your interest rate will be lower. As a result, you will have extra cash in your pocket each month to save, invest or spend on necessities.