The Time Has Come: Save for a Down Payment Today

Why is this the perfect time to start saving money for a down payment? Let’s review a few reasons:

- Right now, time is on your side. With home prices flat and falling in some regions there’s less danger of getting priced out of the market by appreciation while you take time to save. Some experts say Florida home prices are poised to run in place in 2007 and may not begin to warm up for another run until 2008.

- In the current market, getting talked into easy-money and high leverage, low- and zero-down payment Florida home loans to finance for as little out-of-pocket money as possible right now is getting risky. High leverage loans are much better suited for a fast appreciating market where your home quickly generates equity to compensate for your small or missing initial stake.

- Saving reduces costs. Save enough for the down payment and you can remove the need to pay back another bill, say a second mortgage, to cover the down payment, while you also struggle with the first mortgage. Saving also gives you the opportunity to lower financing costs, especially the cost of mortgage insurance, which you won’t have to pay if you have 20 percent or larger down payment.

- Even saving only enough for all closing costs, property insurance and other initial costs to finance your home is a worthy goal that takes some of the financial bite out of home ownership.

The more you save, the more lenders like you. That’s because the larger the personal stake you have in your home the more you lower your risk of Florida mortgage loan defaulting, risk-based studies reveal. Your stake is instant equity to burn should you need it down the road for emergencies and as some protection against flat and falling prices.