Currently, one of our main goals is to save for a down payment for our next house. Due to this, we have been wondering about how much exactly we should save.
With our first house we didn’t put down 20% and had to pay PMI (big mistake), so we will definitely put down at least 20% on our next house.
Also, we are self-employed and I have heard that most self-employed people have to put around 25% to 30% down (and sometimes even 35%!) because banks want to see more upfront from small business owners.
Now, that’s a lot of money!
This has got us thinking. While we are aiming for 30% or more, at what point should we stop saving for our down payment and ramp up our retirement savings instead? Yes, we are still saving for retirement, but should we be saving more?
In the personal finance world, the decision seems to be split. Some are all about paying off a mortgage quickly, whereas others don’t think that’s a good idea. There is no right or wrong answer, which makes the decision a little more difficult. [Read more…]