Author Topic: percentage money down  (Read 1242 times)

kingcanute

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percentage money down
« on: January 26, 2014, 07:08:08 PM »
So, I plan to be in the market for a new house in a new city in a year or so.

Basically, I'm wondering what the consensus is here on how much to put down on a new house - or for that matter a rental.

I quite possibly, have way too much cash in the thinking that I would possibly like to just buy this next house 100% cash.  However, I doubt I'm quite at 100% yet.  Anyhow, is the consensus here that that is just dumb and it should be in the market in one way or another?  I'm not going to agree with that view but I am curious about the mustache outlook on this.

Also, lets say that I owned 100% of my house and wanted to be a landlord. Would it be wise to put 100% down on the rental if I had the cash - or again, is that silly in these parts?  To make it more interesting, lets say, I just bought a house and wanted to save for a rental.  Should I save it in cash, put it in the market, put it in CDs?  If I knew I wanted to do this in order to increase my non-retirement passive income, would it be worth-while to slow down investing in retirement accounts in order to build a larger cash stash for the rental unit more quickly?

Johnny Aloha

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Re: percentage money down
« Reply #1 on: January 27, 2014, 10:40:25 AM »
The answer is it depends on your personal preferences.  For some, paying all cash is less risky and helps them sleep better at night.  For others, they want to take advantage of historically low interest rates and possibly reduce tax burden.

Your goals also play a role - do you want to own one paid off house or several houses with mortgages?

Milspecstache

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Re: percentage money down
« Reply #2 on: January 27, 2014, 09:00:03 PM »
My minimum down would be 20% to avoid paying PMI.

It also depends on interest rate.  If I could get a guaranteed return that was higher than the offered interest rate I might be tempted to get a loan.  However, I also want my residence paid off.

Also look at how much money you might save by paying cash by avoiding some of the closing costs (points, origination fee, etc).