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The Mortgage Professor: Investing in a larger down payment — the yields are incredible, and there is no risk

Consumers looking to purchase a home within the near future face many decisions, including how large a down payment to make. The down payment is the sale price (confirmed by an appraisal) less the loan amount. In most cases, home purchasers must have financial assets at least as large as the down payment they make. DOWN PAYMENT AS AN INVESTMENT: Many consumers put down as little as possible despite having the capacity to put down more because they view the down payment as lost money. But that is a mistake. The down payment is an investment that yields a return that is far above anything else available to consumers, and the return is 100 percent risk-free. Here is an example: John is ...

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