real estate investment

Top 10 Reasons You Should Put a 35% Down Payment for Your House Purchase

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Are you thinking of buying a house? If yes, then you have to start thinking of the down payment you will make. There are houses for sale all over, but first, you have to at least have something in your hands. For a while, many people have preferred a low down payment because they can raise more easily. On the other hand, a high down payment could also be of importance to you when buying a house. How will you get to understand if you don’t try it? Of course, you should try it out and get to see what it means to pay a down payment of over 20%. The following are the top 10 reasons you should put a 35% down payment for your house purchase.

  1. A larger down payment gives you more buying power

A smart potential home buyer will always want to have more buying power. When you have more buying power, you are likely sure of getting any home with ease. With a larger down payment in place, you will likely be approved for a higher loan amount. If you eventually qualify for a higher loan amount, it means you will have the capacity to buy a more expensive home. Any home that will fall under your budget will, of course, not give you any problem. Don’t you want to have this kind of buying power? You know exactly what to do if you want to be in this position.

  1. Smaller loan balance

When you pay a higher down payment, it means you will have a low balance remaining. The loan balance you will be required to clear will be a bit lower compared to if you had paid a low down payment. You will take a shorter time to clear the balance, and you will be free from debts. When looking for a suitable real estate investment, paying a larger down payment might be of help. You’ll not have to stress yourself with a loan balance for long.

  1. Reduced or no Private Mortgage Insurance premiums

As a security measure, Private Mortgage Insurance premiums are always put in place where the down payment is low. This usually happens in the case of a down payment that is lower than 20%. This insurance is usually there to protect the bank just in case a buyer defaults on their mortgage loan. Since 35% is way above 20%, you will not be required to pay mortgage insurance. That’s the beauty of making a larger down payment when investing in real estate.

  1. With a larger down payment, you’ll pay off your mortgage faster

Since making a larger down payment will leave you with a smaller loan balance, it’ll take you a shorter time to clear. Within a short time, you’ll have paid off your mortgage. You will now have time to think of other things and even start saving some money for yourself. Always remember this when looking for houses for sale.

  1. Affordable monthly payments

Putting forward a larger down payment will help you pay affordable monthly payments. Because the loan balance is already small, the amount will be divided into installments that will favor you. The amount you’ll pay per month will be smaller compared to if you had paid a low down payment. Why not try this even if you are looking for cheap houses for sale?

  1. A larger down payment will enable you to enjoy lower mortgage rates

Throughout the life of a home loan, you’ll enjoy paying lower mortgage rates if you pay a larger down payment. You’ll enjoy lower mortgage rates because the loan balance itself is already small. Whether it is in Toronto real estate or any other place, you’ll still enjoy lower mortgage rates.

  1. Protection against price declines

Making a larger down payment of 35% will cushion you from price declines. The likelihood of you getting negative equity due to price decline will be low. You will somehow be safer just because you made a larger down payment. If you see many people struggling to raise larger down payments for new construction homes, don’t ask why.

  1. A larger down payment helps put more equity in the home

What you put forward is exactly what you will own at that time. For instance, if you pay a down payment of 35%, that’s what you will own. The bank, which is, of course, your financier, will own the remaining 65%. The same case applies if you put forward a low down payment. Therefore the best thing to do when investing in real estate is to start with a larger down payment.

  1. Better budgeting options

Struggling to keep a home’s price within a certain budget may not be your thing if you have saved a lot. For example, if your saving is $20,000 and you intend to make a 5% down payment, you will have to go for a house worth $400,000. If that house is not up to your standard, you’ll have no choice since your saving allows you to go for that. What if you had saved more? The story would, of course, be different. For instance, if you had saved about $60,000, this would be 15% of the said $400,000. The secret is to save more for your down payment. You will understand why it makes sense to save more when you’re looking for houses for sale.

  1. You’ll improve your saving culture

If you have been poor in savings, then this could make you pull up your socks. A larger down payment may, at times, be tricky to raise. This, therefore, will require you to save for a while before you can achieve your goal. You will have to save as much as you can for you to be able to come up with the intended down payment. Whether you are interested in pre construction homes or existing homes, you will have to do it. During this time, you will also learn to appreciate the importance of saving.


You should now start planning how you will raise a much higher down payment and enjoy the benefits that come along with it. Don’t be like other buyers who opt for a low down payment if you can raise a higher down payment. The bottom line is that when looking for houses for sale, you need to be prepared with a down payment.

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