Top 3 Reasons You Should Not Put 20% Down On Your First Home Purchase – From Brandon Hutcheson Of Legacy Mutual Mortgage

FRANKLIN, TN / ACCESSWIRE / August 19, 2021 / Everyone who has embarked on the home buying journey knows the well-known adage that they need to have 20% of the home’s purchase price to put as a down payment. Brandon Hutcheson, Mortgage Consultant and Branch Manager for Legacy Mutual Mortgage, has been working in the mortgage industry for two decades, navigating through ups and downs in the market, recessions, and global crises like the COVID-19 pandemic. Hutcheson explains that the 20% down payment school of thought stems from when the mortgage industry started gaining steam, and banks wanted buyers to have a stake in the game. As the market and process have changed, that 20% is no longer always the way to go. Hutcheson shares with us his take on the top 3 reasons why you should not put down 20% on your first home purchase.

1. Get your financial house in order first.

20% down on a home is not always the best path to take as those funds can go to a better purpose to meet overall financial goals, namely paying off bad debts. Mortgages are considered good debt because it is an appreciating asset and they can also have tax deductions in certain situations. Even cars, though necessary, are bad debts as they depreciate over time. Paying off credit card debts, student loans, auto loans, are all ways that money can better benefit a person in the long run, instead of being used as a down payment. Other important financial goals, including having an emergency fund and contributing to a 401k or a retirement fund, can have a more positive impact on your financial well-being both short and long term

2. Time constraints and home appreciation.

Second, not putting 20% down on a first-time home purchase is beneficial because homes are appreciating faster than it takes for people to save up 20%. When they do come to the table with that 20%, the home they wanted is now selling for a higher price, and they still do not have enough. “It might take you two years to save up 20%, and in that time you could lose out on 10, 15, maybe 20% appreciation depending on your market as the home has rapidly increased in value.” Markets across the country are rapidly appreciating, many at over 10% a year. Waiting to buy until you have the 20% down means you have lost out on the financial growth in appreciation of the home, and you have no way to recoup those losses. Going in with a smaller down payment to get in the market as soon as possible often yields better financial benefits down the line. “I tell first-time buyers all the time, you are better off getting in the game now, take advantage of the property appreciation, pay the mortgage for a few years, then sell it and now you have far more money for your next home purchase.”

3. Why spend more money if you do not have to?

There is simply not really a need anymore to put 20% down in order to get approved for a home mortgage. The path to homeownership is no longer so straight and narrow. House prices have nearly tripled in the last 20 years according to Zillow, so the old rules about down payments and mortgages have to change with the changing market. There are a growing number of first-time homebuyer assistance programs, low, and zero-down loans, and even options that allow for a person to not have the huge cost of primary mortgage insurance, even if they do not have the 20% down. In fact, data from the National Association of Realtors recent Realtors Confidence Index shows that 74% of first-time homebuyers did not put down 20%.

Hutcheson works with his clients on the concept of “getting their financial house in order”. He sees that there is an overall lack of financial literacy in the country and education system, and wants to break that cycle for people. “I love helping people get in a better position financially, show them how their home can be their largest asset. For me, this is about just helping people. We do a deep dive into their situation, and then work to get them the right mortgage for their unique situation. We look at other debts, have they saved for retirement, it’s a more holistic, bigger picture approach.”

Hutcheson is over 95% referral-based, working with generations of families to serve all their mortgage needs. He leads a team of highly qualified, dedicated professionals, allowing him to give every client award-winning, personalized service. Hutcheson is licensed in 22 states and helps people all over the country reach their dream of homeownership. He explains that he “fell into” the mortgage business about 20 years ago, and found a passion in it, using his skills and experience as a vehicle to help people better their lives.

Take the first step by connecting with Hutcheson and his team through his website and learn more about why 20% down the way is no longer always the path to take when it comes to new home purchases.

Rates, fees and programs are subject to change without notice- not all applicants will qualify. All opinions expressed on all written materials are Brandon Hutcheson’s and do not reflect the opinion of Legacy Mutual Mortgage. Individual NMLS#470489 Company NMLS# 278675.

Company Name: The Hutcheson Team- Legacy Mutual Mortgage
Contact Person: Brandon Hutcheson
Address: 730 Cool Springs Blvd Ste 110, Franklin Tn 37067
Phone Number: 615.866.9468
Website Link:

SOURCE: The Hutcheson Team- Legacy Mutual Mortgage

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