Reply to Extra monthly cash: pay down mortgage or save for downpayment (not the same thing!)

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Reply to "Extra monthly cash: pay down mortgage or save for downpayment (not the same thing!)"

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[quote=Anonymous]I'm 17:09, at least that is my most recent post :).  Based on the extra $500/mo you have, I think you can afford a larger mortgage, but I don't see how $30,000 is enough for a down payment.  My advice was to save until you have a larger down payment and more savings overall.   But, if your parents are willing to loan you $50,000 I guess you don't need to worry about that.  With this new info, I'd put the extra towards your mortgage, since as someone pointed out your interest rate is higher than what you would get by stashing the money in a 1% interest savings account.

As for the market crashing again, your house would lose value (depending where you live) and you could lose the extra money you put towards your mortgage if you tried to sell.  But at the same time, if you just save the money, you will own more on the mortgage when trying to sell, thus have a larger loss.  I don't think either option puts you further behind, but paying down the mortgage could put you further ahead (hope this makes sense).  [/quote]

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