3% vs 20% Down Payment

Putting 20% down payment can hurt you financially in the long run when the interest rate is low….

Young buyers should reconsider putting the standard 20% down payment towards buying a house because interest rates have dropped significantly over the years. I suggest holding onto the money to build wealth through financial freedom rather than dropping it all to meet the 20% rate. As long as interest rates stay low, paying for private mortgage insurance (PMI) is more economical in the long run. Following Portland market trends, property value will likely rise year by year, the loan amount (96.5% of the purchase price, assuming 3.5% Downpayment) will be less compared to future inflation adjusted worth. By not paying the down payment to avoid PMI, the buyer can use leftover funds for other investments such as index funds, stocks or real estate to increase wealth with time. Especially for first-time buyers, leveraging capital through other investments is more economical due to the currently low-interest rates, allowing options when considering down payments on a new home.

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This website and Youtube videos are for entertainment purposes ONLY. IF stocks, real property or companies are mentioned, DO NOT make buying or selling decisions based on Shawn’s videos. If you need advice, please contact a qualified CPA, attorney, insurance agent, contractor/electrician/engineer/etc., financial advisor, or the appropriate professional for the subject you would like help with. Any use of other media is by fair-use or license only. Shawn Yu & Shawn Realty is a licensed principal real estate broker/brokerage doing business in Oregon. This may include an advertisement of property for sale represented by Shawn Realty. Any mention of properties listed or sale or otherwise shall not be construed as anything other than an opinion for entertainment purposes and/or advertisement of Shawn Realty representing parties only. Shawn Yu is not a CPA, attorney, insurance, contractor, lender, or financial advisor.

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Published by Shawn Realty - Oregon Real Estate Brokerage

Shawn Yu, aka Shawn Realty is known for having a keen sense of the real estate market, a great knowledge and experience in price negotiation & inspection negotiation for sellers and buyers. Top 7% Selling Real Estate Broker in the Portland Metro Areas (FIVE Star Real Estate Agent 2015 - 2019).

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