Line Up Your Down Payment Cash Now

It's not uncommon for today's buyers to worry more about their down payment than their monthly payment. Before you get serious about finding a home, be sure to line up your available cash for a down payment. Knowing how much cash you have will affect your "loan to value" (down payment as percentage of home value), which in turn influences rates and private mortgage insurance (PMI). PMI is required by lenders to protect them against loss when a down payment is less than 20%. The extra monthly cost of PMI in turn reduces the amount you can borrow -- and the home price you can afford.