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You have some time to save for that down payment By Justin Hunter

Saving for a down payment is the first step towards home ownership for every prospective buyer, or at least it used to be. The emergence of nontraditional mortgage options has allowed many people to obtain the finances necessary to purchase a home without putting very much if any money down. While these options are a great asset for borrowers in various financial situations, every home buyer should still strive to save as much as possible for the down payment, and now there’s more time to do so.

The larger the down payment, the more manageable and less expensive any mortgage will be.
The article, “It's Time To Save For A Down Payment,” written by Broderick Perkins and published February 21, 2007 on Realty Times explains that the current periodic lull in home price appreciation is providing many prospective home buyers a little more time to save for a larger down payment.

The traditional benchmark for the ideal down payment is still 20 percent although very few people strive for that any more.
“Saving for a 20 percent down payment will get you a shot at the best mortgage rate, no mortgage insurance and a chance to call some of the shots with your lender, but it can take some time.”

The reason why now is a great time to start saving for that down payment regardless if you are planning on purchasing property now or in the future is because of several years of double digit percentage home price inflation, prices are barely inflating in wake of the housing correction.
“For all of 2006, the median price rose by only 1.1 percent to $222,000, up 1.1 percent from $219,600 in 2005.”

“Even 20 percent down on a $200,000 home ($40,000) is a big chunk of change to save -- more than $3,300 a month to reach the goal in a year, $1,650 a month for a two-year savings binge -- without considering interest.”

With that being said, more time may still not make it feasible for many prospective home owners to accumulate 20 percent of the purchase price of a property. But while 20 percent is ideal, any down payment that is more than you originally could afford with less time is worth saving for.
“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 home prices are poised to run in place in 2007 and may not begin to warm up for another run until 2008. How much time you really have is anybody's guess.”

But instead of just relying on nontraditional mortgages to cover the costs of the mortgage insurance that results from a less than 20 percent down payment, you can still borrow one of these mortgage options with a decent down payment, which will lower all costs of your mortgage.
“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.”

And the more money you can save, the more lenders will like you. Well, actually they like your money, but the more money you can use towards a down payment the less risk the lender will believe you are to lend to.
So, saving as much as possible regardless of the mortgage you wish to borrow will lower your mortgage payments and increase you borrowing power.

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