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The Down Payment
Perhaps no single decision in a real estate purchase has more variables as "How much money do I put down?". All of the conventional wisdom centers around either putting down as much as you can or as little as the lender allows.

If you put down a large payment, you get some leverage with the lender: little or no mortgage insurance, a good equity position, and perhaps a preferred mortgage deal. You will also have lower mortgage payments. A disadvantage of a large down payment is that you will be using after-tax dollars on which you could be earning interest. You will also have less tax-deductible interest.

The advantages of a low down payment are not insignificant. You will have more tax deductible interest, and your investment value percentage will increase faster. Contrary to the effects of a large down payment, you will have little equity at the outset, and your payments (and perhaps your interest) will be higher. You will also keep more of your own money in hand to potentially earn more interest in other investments.

 
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