Saving up a down payment of twenty percent is no easy feat.  In fact, most first time homebuyers in San Diego opt for FHA loans, where the down payment requirement can be as low as 3.5%.  However, it may be best to put the largest down payment down possible.
Why?  Here are a few reasons:

You’ll have a lower interest rate.

The lower your loan-to-value ratio is, the lower your interest rate will be because you represent less of a risk to lenders.  The bigger down payment you have, the lower your loan-to-value ratio is.  Therefore, you’ll have a lower interest rate if you put down a bigger down payment.

You’ll save money in the long run.

If you can save up more money for a down payment, you’ll end up paying less money because that’s a lesser amount of a loan that you will have to pay interest on eventually.  Even adding an extra $5,000 could end up saving you thousands of dollars in the long run.

You’ll be protected with a low appraisal.

If you put forth a big down payment, there will be a big cushion between the home’s value and the about of the loan.  When rates go down in San Diego, you will need good value to take advantage of those lower rates.  If the appraisal gives a value that’s lower than expected, you can be protected from those higher rates.