How large of a down payment should you make?

If you can afford it, paying 20% down often qualifies you for a lower rate and saves you from having to buy mortgage insurance. Paying more than 20% only makes sense if you have an aversion to debt or if you think the property will provide a better financial return than putting that money in stocks or other investments.

If you know you can't make the 20% threshhold and are wondering how much to pay between 0% and 19%, here are some tips:

- There are 0%, or no-down-payment, loans. Learn about them here.

- The bigger a down payment you make, the more equity you start off with. One nice thing about having more equity is that, if your property loses value for some reason, you are less likely to find yourself "upside down" on your loan (owe more than than the property is worth).

- If you have a better use for the money you'd otherwise use for a bigger downpayment, then it may make sense to put less down. For example, if you have a sure-fire investment opportunity that you're confident will pay a higher return than the interest rate you pay on your loan, then go for it. (Just remember that there is really no such thing as a sure-fire investment.)

- If you are anticipating a substantial raise or other boost to your monthly income, then doing a smaller downpayment is more sensible, as you'll be better able to handle a larger monthly interest payment.