In the same time period that jumbo loans’ APRs leveled off with conforming loans, there has been a similar trend involving down payment requirements. Previously, it was required that a buyer place a 20% down payment for a jumbo loan. However, these days, a first time home buyer can putas little as 5% down.
While those percentages are exciting, there are also advantages to committing larger down payments in real estate. The most obvious benefit of larger down payments is that the more you pay now, the less you pay later.
Higher down payments can also favorably adjust your APR. You also can’t predict the future. In addition to smaller monthly payments, lowering your monthly mortgage rate by putting a large sum of money down will ease your stress if you ever plan on changing careers or selling your home. And, with a higher down payment, you can also avoid the added cost of private mortgage insurance.