Nick Perry argues against putting 20% down upfront on a home. Instead, make the minimum down payment to lock in the lowest rate, then immediately pay a lump sum toward principal and request a loan recast. You'll get a lower monthly payment, avoid mortgage insurance, and keep the best interest rate.
I would never put 20% down when buying a home. Higher rate kills the deal. Sure, I get a lower payment and I get to avoid mortgage insurance, but my interest rate's higher. This is what I would do. I put the minimum amount down to get the lowest interest rate, and then right after I close, that 20% that I'd saved up, I would put a lump sum towards the principal balance. Lump sum hits the principal. What this does, it keeps you locked in on that low premium interest rate, and then your loan gets recasted, which means the bank recalculates your new balance and sends you a new monthly payment based on the original locked-in interest rate. So now you have a lower payment and a lower interest rate. Stop overpaying. Don't ever overpay. Lock in the premium pricing before your first payment's even due. Put the lump sum towards the principal and recast like a pro.
