The Down Payment Isn't Everything

The Down Payment Isn't Everything

Spending all or most of their savings on down payment and closing costs is one of the biggest mistakes first-time homebuyers make, Conarchy says. "Some people scrape all their money together to make the 20 percent down payment so they don't have to pay for mortgage insurance, but ... they are left with no savings at all."

Homebuyers who put 20 percent or more down don't have to pay for mortgage insurance when getting a conventional mortgage. That usually translates into substantial savings on the monthly payment. But it's not worth living on the edge, says Conarchy. "I'd take paying for mortgage insurance any day over not having money for rainy days."

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