The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: aneel on May 01, 2017, 06:02:46 PM
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To add to the recent mortgage debate frenzy, I have a related question: how much should one put down on a home? We're relocating to North Carolina from Boston, with the anticipated sale of our current home we will potentially be in a position to put down more than 20%. Is this a mortgage sin? Should we consider points instead?
FWIW I'm team don't pay down the mortgage:)
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If you don't believe in paying down the mortgage you logically can't believe in points.
If you want a lower interest rate get a shorter mortgage, such as 15 or even 10 years.
If you believe in investing instead of paying down take the 30 year as is with 20% down and invest the rest. If you're REALLY confident screw 20% down and invest that too and just pay PMI....pmi is usually 1% of loan so to have your 20% down payment to make more than 1% of total loan you need to make 5% on it.
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If you're on "team don't pay down on the mortgage", just put down 20%. PMI is a terrible cost of money. Never worth it, if you have a choice (like borrowing from a "loan shark").