Question: I am searching for a new home (main residence) and was wondering whether I should use a huge downpayment and dent my assets or take a large loan and keep some assets, considering inflation, decreasing mortgage rates, and current turmoil. Thank you — I love you show. Thank you for not printing my name. Anonymous.
Answer: I wonder what you mean by a “huge downpayment”? The traditional figure of a 20% downpayment is good benchmark. I wouldn’t strap myself for cash–a home take money to maintain–to far beyond that percentage. And with the economy is recession or near-recession I’d want to have a healthy cash emergency safety net. Call it your “just-in-case” money. You can always accelerate principal payments on your own if it makes sense.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
