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Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: FreedomFighter on January 14, 2019, 08:56:35 AM

Title: First Time buyer where to hold down payment
Post by: FreedomFighter on January 14, 2019, 08:56:35 AM
Hey, everyone, the wife and I are looking to become first time home buyers this summer. We've been saving up for 20% downpayment for the last two years. We're keeping 60k in VMMXX Vanguard's Prime Money Market fund. We're leaving a HCOL area for a MCOL area, all relative but we're targeting 75k down payment. Is this a solid vehicle if we're looking to buy 6 months from now? I am looking to get higher returns, over 100 dollars a month vs 20 dollars a month in a regular savings account. Just wondering the communities thoughts on whether there is a better way or if I'm missing anything.
Title: Re: First Time buyer where to hold down payment
Post by: YttriumNitrate on January 14, 2019, 09:17:44 AM
Well, you could do some account churning with that money and probably get a bit more...but since you'll be taking out a big loan soon it's probably best to just keep it in VMMXX.
Title: Re: First Time buyer where to hold down payment
Post by: GW on February 20, 2019, 09:06:03 AM
I was looking for some information on this. What is the best investment vehicle for a first time homebuyer down payment? Is it a mutual fund, money market, or start a RothIRA and take off of that. I believe you can pull money from that as a first time homebuyer, correct me if I'm wrong.
Title: Re: First Time buyer where to hold down payment
Post by: haflander on February 20, 2019, 09:21:14 AM
PTF. I'll be in a similar situation soon. Obvi, the closer you are to purchasing, the more safe you want the vehicle to be. 6 months away, I don't see anything wrong with VMMXX. I'm 3-5 years away...in my situation, the only vehicles I don't see mentioned above that I also want to consider are I bonds or maybe a mixed stock/bond fund such as VGSTX or VBINX. Anything involving stocks would make me nervous in a historically long bull market...but if you want higher returns, you must accept higher risk.

Disclaimer: I know way less about all of this stuff than most around here.
Title: Re: First Time buyer where to hold down payment
Post by: Finances_With_Purpose on February 24, 2019, 12:24:13 AM
Well, you could do some account churning with that money and probably get a bit more...but since you'll be taking out a big loan soon it's probably best to just keep it in VMMXX.

Yeah, don't churn.  Then you have to establish the history of the funds, etc., and banks can get weird about it.
Title: Re: First Time buyer where to hold down payment
Post by: i_have_so_much_to_learn on March 05, 2019, 01:24:07 AM
+1 to previous comments. Banks are required to report any fishy activity, even if it doesn't look fishy to you. Thus, moving money around too much could give the impression of laundering. If you already have a mortgage banker and you're pre-approved, I would check with them if they think it is OK - but i wouldn't mess around with it too much for a couple hundred bucks.