Here at Buyer Investor Match, we weight how serious a person is about buying a home by the amount of money he or she is willing to put down. It’s such an important yardstick that if a person is able to put at least 15% down and meet some other criteria, we don’t even check credit score or verify the income when making an owner financing arrangement to enable him or her to buy a home.

Our financing model for credit challenged buyers has been created from many years of experience and analyzing the data of thousands of home deals. Quite obviously, we place a lot of importance on the down payment amount and for good reasons. (Related article: Easy ways to arrange for a down payment for your home purchase)

Even if you are planning to take out a mortgage from a conventional bank, here are four reasons why you should put down at least 15% or more when buying a home:

It shows your discipline with money

Saving for down payment is not easy. Down payment is in fact the biggest obstacles to homeownership for the majority of households in the U.S. If you have arranged for at least 15%-20% down payment, it means you are disciplined with money.

If you are struggling to obtain a mortgage for some financial oversights or missteps in the past, it doesn’t mean that you are careless with your finances. We believe you have been able to save towards a down payment only if you learned from these mistakes and organized your life in a proper way.

Your mortgage application can also be turned down for a variety of other reasons including the lack of social security number or stated income. These factors may be important for conventional lenders who have to follow a set of underwriting norms, but here at Buyer Investor Match, we take a lot of other factors including a person’s attitude towards his or her finances. If you have arranged for a 15%-20% down payment, it shows your finances are in a good shape, and that’s what is important to us.

Private Mortgage Insurance

You have to pay private mortgage insurance (PMI) on top of your monthly interest and principal amount if your down payment is less than 20%. It’s because lenders will consider you a risk in case your down payment amount is low. They will secure the loan with PMI. The PMI payments can add up to thousands of dollars over the life of the loan. A high down payment will help you avoid this additional financial burden.

Lower monthly mortgage payments

A mortgage is a long-term financial commitment. Most home loans have an amortization period of 30 years. In such a scenario, it is important that your monthly mortgage payments are manageable and affordable. This is exactly what a high down payment will help you to achieve. Since you will put down more, you will borrow less. You will find it easier to keep up with your mortgage payments. Your timely payments will help you build your credit.

Build equity faster

A 20% down payment means that you already own 20% of the property. In other words, you start with owning a good amount of equity. It safeguards you in case the housing markets crash like they did during the 2007-08 financial crisis. If you don’t own any equity in your home in such a scenario, you will end up owing more than the house is worth. You will have a hard time refinancing or selling your home. On the other hand, if home prices appreciate faster, you can use the equity for a cash-out refinancing and other things.

In conclusion

It must be obvious why we give so much importance to your ability to pay at least 15% down payment. With our Buyer Investor Match system, you can buy a home with no credit check or income verification. If your mortgage application is being turned down even when you have arranged for a down payment of 15% or more, we can help you buy a home with owner financing. Interested in learning more about our program? Just click the button below to take your first step towards homeownership: