About the Chesapeake Bay and Gloucester, Virginia Area 

Perhaps no single decision in a real estate purchase has more variables than "How much money do I put down?" Conventional wisdom centers around either putting down as much as you can or as little as the lender allows.

If you put down a large payment, you get some leverage with the lender, such as little or no mortgage insurance, a good equity position, and perhaps a preferred mortgage deal. You will also have lower mortgage payments. One potential disadvantage of a large down payment is that you will be using after-tax dollars on which you could be earning interest. You will also have less tax-deductible interest.

When you buy a home with a low down payment, you will have more tax deductible interest, and your investment value percentage will increase faster. You will have little equity at the outset, and your monthly mortgage payments (and perhaps your interest) will be higher. However, you will also keep more of your own money in hand to potentially earn more interest in other investments.

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Tim Rowe
RE/MAX Bay Country
P.O. Box 1188
Gloucester, VA 23061
804-725-6099
Fax: 804-693-0580
timrowe@NUMBER1EXPERT.com

Tim Rowe has been selling Real Estate for 20 Years. He is an Accredited Buyer Representative, a Certified Residential Specialist and a member of the RE/MAX 100% Club and Executive Club.

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