Author Topic: should I do large down payment on house?  (Read 1525 times)

fizzgig

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should I do large down payment on house?
« on: February 06, 2017, 11:37:04 AM »
I have about 150K in index funds earning about 7% at the moment.
If I can find an affordable house around here, there are 15 yr mortgages at about 3% interest.
Does anyone think it would be worth putting 100K or more from my index funds down on a house? I would continue to add savings to the fund after the house is bought, about 20K a year, but the fund would take a big hit initially from buying a house.

frugaliknowit

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Re: should I do large down payment on house?
« Reply #1 on: February 06, 2017, 11:54:59 AM »
Congrats on the Index Fund balances!

More information, please:

Age/how far from FIRE or retirement
Marital Status or Partner, if any, contributing
Household Income (just yourself?)
Other debts, if any
Other savings, if any
Cash balances, if any

Mrtreasuretoupee

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Re: should I do large down payment on house?
« Reply #2 on: February 06, 2017, 12:02:01 PM »
I'd put enough down to avoid the PMI (around 20%) because the money is earning you more in the index fund that it will cost you in interest.

fizzgig

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Re: should I do large down payment on house?
« Reply #3 on: February 06, 2017, 12:08:28 PM »
Hi,
I'm 40 years old, I don't really expect to retire early, just putting my savings in VTSAX, I just started doing that 2 years ago.
At the moment I have a partner splitting living costs with me. I make 57K a year.
No debt, an additional 30K or so in checking or savings

neo von retorch

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Re: should I do large down payment on house?
« Reply #4 on: February 06, 2017, 12:15:01 PM »
Math says... leave your money invested. Put 20% to avoid PMI. Enjoy your low interest rate. (Even consider a 30-year despite the higher interest, since over the long-term, it lets you invest earlier with those smaller payments.)

frugaliknowit

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Re: should I do large down payment on house?
« Reply #5 on: February 06, 2017, 01:28:54 PM »
I would put 20% down, 15 year amortization (in part due to the fact that you are 40) and invest the rest.