Posted by
Member since Aug 2006
27 posts

re: Down payment on a home - how much is too much?
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.
This post was edited on 2/23 at 1:27 pm

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Alabama Fan
Member since Sep 2009
648 posts

re: Down payment on a home - how much is too much?
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%.

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