houtigerfan LSU Fan houston Member since Aug 2006 12 posts
re: Down payment on a home - how much is too much? (Posted on 2/23/13 at 1:26 pm to dustinm27)
This is horrible advice. The 3.5% is really not 3.5% as the interest is front loaded and not evenly spread across the loan. The OP needs to look at the amortization schedule on the loan.
Most people are in their homes for only 5-10 years, particularly their first home. In this scenario, most of the mortgage payment will go to interest rather than principal. Interest is wasted money (after you take the tax deduction).
A 15 year loan would significantly reduce the amount of money that is wasted on interest.
bamanmemphis Alabama Fan Member since Sep 2009 432 posts
re: Down payment on a home - how much is too much? (Posted on 2/23/13 at 4:09 pm to Powerman)
We just went through this.
We had well enough for 20%, but now lenders are offering a lender paid MI. We got a rate 1/8 higher for the lender paid MI, opposed to putting down the full 20%.
It is still a great rate, tax deductible, and we can invest the left over money and get returns more than 3.5%.
