Down payment size, would you do 50%

[Anonymous]

Anonymous wrote:

Anonymous wrote:Where is all your money going? You don’t have huge savings. Buy a cheaper house. 200k down.

Because I’m only 30 and don’t have any inheritance like most people here, had student loans (now paid off), and haven’t been making our income for that long. We also just bought a new 35k car in cash because we only had a single 10 year old Corolla. Now we have 2 Japanese economy cars.

for being young and having student loans and a not crazy high (but perfectly respectable) income, I think you are doing great.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Where is all your money going? You don’t have huge savings. Buy a cheaper house. 200k down.

Because I’m only 30 and don’t have any inheritance like most people here, had student loans (now paid off), and haven’t been making our income for that long. We also just bought a new 35k car in cash because we only had a single 10 year old Corolla. Now we have 2 Japanese economy cars.

Most of us don't have inheritances. We save and do what we can afford. You have a large income and living over your means. Buy a $700K house, with $150K down and save more. We bought a very small fixer upper (if you can even call it that) as that was what makes sense. Never upgraded and paid it off.

[Anonymous]

Earning a 7.5 percent after tax return on investments in a brokerage account is not easy or guaranteed.

[Anonymous]

All things being equal, I would rather be liquid.

[Anonymous]

I'm curious why the monthly payment would be "too high" in this situation. If you empty out your investments, you're going to take a long long time to save up the same amount of money to get to where you currently are. Assuming you get a slightly lower mortgage, let's say $2,000, how many months will it take you to save up the extra $300K you put down for your down payment from just saving $2,000 a month? You also have to realize that the $300K will, on average, increase by 10% each year in the s&p 500. So in one year, your 300k will grow 30k. Meanwhile, you've saved only 24K extra from your lower mortgage payment of 2K a month. This doesn't make sense to me.

OP - I think we need more info on how much you guys currently spend on needs/wants and how much you currently save each much. We also need how much you think you'll save on the mortgage if you make a 50% downpayment, rather than 20%.

[Anonymous]

yes. I am currently in the market for an investment property and to make the numbers work I have to put down 500K on a 1M house. I just sold 3 BTC today and will be pulling out of brokerage to get the remainder.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Where is all your money going? You don’t have huge savings. Buy a cheaper house. 200k down.

Because I’m only 30 and don’t have any inheritance like most people here, had student loans (now paid off), and haven’t been making our income for that long. We also just bought a new 35k car in cash because we only had a single 10 year old Corolla. Now we have 2 Japanese economy cars.

Most of us don't have inheritances. We save and do what we can afford. You have a large income and living over your means. Buy a $700K house, with $150K down and save more. We bought a very small fixer upper (if you can even call it that) as that was what makes sense. Never upgraded and paid it off.

This. Does your wife SAH? If so, I would never want to be that overextended on a single income, especially after you have tossed all of your savings into an illiquid house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Where is all your money going? You don’t have huge savings. Buy a cheaper house. 200k down.

Because I’m only 30 and don’t have any inheritance like most people here, had student loans (now paid off), and haven’t been making our income for that long. We also just bought a new 35k car in cash because we only had a single 10 year old Corolla. Now we have 2 Japanese economy cars.

Most of us don't have inheritances. We save and do what we can afford. You have a large income and living over your means. Buy a $700K house, with $150K down and save more. We bought a very small fixer upper (if you can even call it that) as that was what makes sense. Never upgraded and paid it off.

I would be conservative with how much you buy. You will be paying for childcare or your spouse will be staying home with the child so you do not want to overextend.

[Anonymous]

I would not do this. Use your $40K cash and cash out $50K from your brokerage account. With your salary, you should be able to afford the monthly payment on a million dollar house if you have a $700K loan.

[Anonymous]

Especially if you're single income, I would not put all your money into a house. As a previous poster said, run some numbers on where you are in terms of interest and payment size, depending on your down payment size. You might find that there is a ceiling to how low the interest will be, so you may want to go with a down payment right around the lowest point.

[Anonymous]

No one can answer this question. But if you are dual income put enough down to afford it one income

[Anonymous]

OP, we had a bit of a windfall a while ago from selling our previous house for more than twice what we'd paid for it, so we faced a similar decision on how much to put down on the new one. We opted to go with 20 percent and invest the rest, and we figured if we had to dip into investments occasionally because we were spending more on the house than we really wanted to, that'd be fine.

It didn't take very long for our pay to rise to a level where we felt more comfortable in the mortgage (though we also have a sub-3 percent mortgage rate now, so that's a big potential difference). But the money is all fungible unless it's part of a down payment — if you invest it somewhere where it's earning more than your mortgage interest rate is, you can also still be flexible with taking some of it out to cover your housing costs. Once you put it into a 50 percent down payment, you can't really access it without taking out a HELOC.

[Anonymous]

It depends on your numbers and preferences. We put 30% down to get the PITI a a level we were comfortable with. We could have put down only 20% and relied on investments, but as we've all seen index funds tend to go up over the long term but can have serious dips along the way. Its really about your preference and which way you want to hedge your bets.