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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