Spending all or most of their savings on down payment and closing costs is one of the biggest mistakes first-time homebuyers make.
|Don't deplete your entire savings|
Homebuyers who put 20 percent or more down don't have to pay for mortgage insurance when getting a conventional mortgage. That's usually translated into substantial savings on the monthly mortgage payment. But it's not worth the risk of living on the edge.
I'd take paying for mortgage insurance any day over not having money for rainy days. Everyone -- especially homeowners -- needs to have a rainy-day fund.