Author Topic: are large down payments worth doing?  (Read 1565 times)

fizzgig

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are large down payments worth doing?
« on: February 06, 2017, 11:41:59 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.

RWD

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Re: are large down payments worth doing?
« Reply #1 on: February 06, 2017, 03:33:02 PM »
The mathematical/statistical approach is to put down 20% to get the lowest possible rate. Any more than that you're buying stability at the [potential/probable] expense of investment returns.

Frankies Girl

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Re: are large down payments worth doing?
« Reply #2 on: February 06, 2017, 04:21:17 PM »

talltexan

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Re: are large down payments worth doing?
« Reply #3 on: February 07, 2017, 08:18:37 AM »
maybe you should consider a $400,000 house so that you only have to put $80 K down?

Cwadda

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Re: are large down payments worth doing?
« Reply #4 on: February 07, 2017, 02:30:26 PM »
Are you looking for a primary residence or a rental property?

GoBigRed

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Re: are large down payments worth doing?
« Reply #5 on: February 10, 2017, 09:51:50 AM »
What is your target purchase price?  I don't believe you mentioned that.  The analysis changes if you are talking about putting $100K down on a $200K house, vs. $100K on a $500K house (20%).  I like the advantage of the low interest rates, so personally would only put down the minimum % required to avoid PMI, typically 20%.

I am assuming you are currently renting?  If that is the case, what is your monthly rent compared to what you expect your mortgage payment to be?   In some markets, it makes a lot of sense.  In others, its better to rent.  Doing a 30 year could make the analysis more favorable for buying.   

You can also buy a house and do things to make money through home ownership, such as house hacking or live-in flips.  Not sure if either of these appeal to you.