Which Down Payment Strategy is Right for You?

Real Estate Agent with Coldwell Banker Residential Brokerage SA552583000

You’ve most likely heard the rule that you need to save up for a 20% down payment before you buy a Havasu home. The logic behind saving 20% remains solid. It shows that you have the financial discipline and stability to save for a long-term goal. It also helps you get favorable rates from lenders. With interest rates on the rise, that translates to potentially saving tens of thousands of dollars. But there can actually be financial benefits to putting down a small down payment—as low as 3%—rather than parting with so much cash up front, even if you have the money available. So, how do you decide which down payment strategy works best for you? Weigh the pros and cons before you determine which one to go with.

Financial experts suggest a 20% of the sale price down payment when buying a Havasu home. But is that always the best strategy? Liz Miller Lake Havasu AZ

Which Down Payment Strategy is Right for You?


Click here to search Lake Havasu homes for saleThe downsides of a small down payment are pretty well known. You’ll have to pay Private Mortgage Insurance (PMI) for years. The lower your down payment, the more PMI you’ll pay. You’ll also be offered a lesser loan amount than borrowers who put down 20% of the sale price. In turn, this eliminates some homes from your search.


The national average for home appreciation is about 5%. The appreciation is independent of your home payment. So, whether you put down 20% or 3%, the increase in equity remains the same. If you’re looking at your home as an investment, putting down a smaller amount can lead to a higher return on investment. It also leaves more of your savings free for home repairs, upgrades, or other investment opportunities. With the median sale price of a Havasu property coming in at roughly $450,000 in June, that means a down payment of between $13,500 (3%) and $90,000 (20%).

A Happy Medium

Of course, your home payment options are not binary. Most borrowers can find some common ground between the security of a traditional 20% and a more investment-focused, smaller down payment. Your trusted real estate professional can provide some answers as you explore your financing options.


Liz Miller Lake Havasu Az 2662 Saratoga Ave Lake Havasu City Az

Visit any of my Lake Havasu real estate sites below for more information on the Havasu market:

Homes for Sale in Havasu
Havasu Area Homes
Just Call Liz

Originally posted on my Lake Havasu area real estate blog here: https://havasuareahomes.com/which-down-payment-strategy-is-right-for-you/.

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Comments (3)

John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Hello Liz Miller very good helpful report for which down payment strategy is right for you.

Jul 20, 2022 04:42 PM
Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net


Enjoyed your blog, and I added you as a friend. I would love the follow back. Thanks Bill

Jul 21, 2022 07:16 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Liz, buyers do have choices with loan programs, and congrats on this cute listing!

Jul 21, 2022 08:36 AM