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Should I Wait to Put Down a Bigger Down Payment?

Oct 18th 2015 at 11:40 PM

Real estate in the Lake Tahoe region is becoming a real commodity, and there can be a lot of pressure on prospective home buyers to grab their little piece of paradise as soon as possible.

But is it always advisable to be quick on the trigger? Buying a home is a major life decision, after all.

Waiting for the right time and saving up money for a bigger down payment also has its advantages in the long run, but are they worth delaying your ability to move into the region you want to live in?

There's a lot of angles to consider, and nobody wants to make a wrong choice, so here's the overview.

Plenty of Fish in the Lake

The most important part of buying a home is ensuring that the building meets all your needs without making you pay for features you don't need. More bedrooms can make a house attractive to large families, but a bachelor would never want to pay such a premium for glorified closet space.

If you have the luxury of waiting, and nothing your realtor has shown you has impressed you yet, then keep your eyes open and keep saving up so that you'll have an even stronger down payment to put down later, and lower monthly payments as a result.

But, of course, once you've found a place that really calls to you, you'll want to move fast so that it doesn't go to someone else! What good is a large down payment if the house you want gets sold before you get there?

Market? I Hardly Know It!

Federal interest rates, general demand, and relative prices of real estate in Lake Tahoe can fluctuate, to create what are traditionally called "buyer's markets" and "seller's markets".

People hear it's a buyer's market, and so they rush to buy, increasing demand (and prices) and causing the market to become a "seller's market".

Alternatively, people can be reluctant to buy during a "seller's market" for fear of getting a raw deal. This fear will eventually drive demand down, forcing sellers to lower prices, thus creating a "buyer's market".

These market trends are not only mercurial, but they are ultimately out of a buyer or a seller's control, and waiting for "good market conditions" can backfire as often as it pays off.

The Best Advice

This is the bottom line: it’s important to continually save and have as big a down payment as you can, but there’s no one-size-fits-all answer for how big a down payment you need.

The best time to buy a house is…when you need a new house!

About the Company:

Granger Group is a leading real estate company in Northern California, driven by honesty, integrity & professionalism. Linda Granger has a well-earned reputation for top-tier real estate service in the Lake Tahoe/Truckee area. Granger Group’s team believes in delivering the highest-quality care to buyers and sellers throughout Lake Tahoe, from Truckee, CA to Incline Village, NV and beyond.

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