Reply to Afford $1.8M on 300K?

Forum Index » Real Estate

Reply to "Afford $1.8M on 300K?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous]I haven’t followed the entire thread, but has OP indicated how much savings they have? One option is to make a large down payment to make the monthly payments affordable. Our HHI is $225k and we will probably buy at $1.5 million but we have very substantial savings due to being frugal, investing wisely, and having no kids. So we will put at least 50% down and still have plenty of investments and savings left (at least seven figures left). I guess based on the comments here we will be viewed as the poors in our new neighborhood when we buy but who cares. [/quote]

Op here - I haven't said much about my savings because I didn't think it was relevant to the conversation - I would say my finances are similar to yours. Probably around $1M in fairly liquid assets. Others on this thread have opined that smaller mortgage are better, and i still don't understand why.  In your case, you are paying down 50% in order reduce monthly payments.  Can I ask why you don't consider downing 20% and separately investing the other $450K (~ 1.5M * .3)?  If a bank is willing to lend me an extra $450K for tax advantaged and (relatively) low interest rates, why wouldn't I do that?  Or do you imagine that you can't find investment opportunities that garner greater than 3.5 (or 4 or 4.5%) ROI?  If no such opportunity arises, I don't see why you couldn't use the $450K to reduce your mortgage principal later on.  If the monthly payment @ a 20% DP becomes too large, you also could use the $450K to recast the mortgage to lower the monthly payments later on.

I'm asking because (as others on this thread have surmised), I'm financially illiterate and I'd like to crowd-source some ideas.

Thanks in advance

[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics