Payment Planning

In a recent “Consumer Notebook” column, Robert J. Bruss said that the best down payment is often the smallest.

He didn’t address the issue of a smaller down payment causing monthly payments that could be considerably more than the buyer can afford.

Also, if you make less than a 20% down payment, you must buy private mortgage insurance, which can add a rather hefty sum to the monthly payment.

Over the course of years until the equity reaches 20% of the original purchase price, your added PMI plus added interest negate some of the leverage of making a small down payment.

LYNZIE FLYNN

Via e-mail