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Started By
Message
money down on a new house
Posted on 3/11/14 at 5:01 pm
Posted on 3/11/14 at 5:01 pm
hey guys we are looking at new homes and thinking of doing 20% down. what are the advantages of this other than PMI and do you think its a good idea?
it will eat up most of our savings account and I have stocks and bonds as a backup but one person was telling me it might be smarter to keep your money in the bank and just put 5 or 10% down and pay off the PMI.
FYI house price range is 375-425k
it will eat up most of our savings account and I have stocks and bonds as a backup but one person was telling me it might be smarter to keep your money in the bank and just put 5 or 10% down and pay off the PMI.
FYI house price range is 375-425k
12
Posted on 3/11/14 at 6:02 pm to dallastiger55
Beside the already mentioned PMI your monthly note will be lower, obviously. Take the amount you save each month in a lower note and no PMI and build up your emergency fund.
Posted on 3/11/14 at 6:04 pm to dallastiger55
quote:baller
FYI house price range is 375-425k
Posted on 3/11/14 at 8:09 pm to dallastiger55
So this person thinks you should keep money in the bank making little to no interest so you can pay more interest and PMI on top of that? I'm certainly not of the "pay cash for everything" guys like some on this site, but it doesn't seem to make much sense to me unless you have a way to make well more than your interest + PMI with high probability. If you're concerned about your emergency fund you can always liquididate the stocks for some extra peace of mind.
Posted on 3/11/14 at 8:36 pm to dallastiger55
Search this board. plenty of threads that talk about PMI and the advantages / disadvantages and it is worth it to you with other factors such as interest, inflation, etc.
This post was edited on 3/11/14 at 8:37 pm
Posted on 3/12/14 at 10:31 am to dallastiger55
The smarter move would be put as much down as possible, but if that will cripple your cash too much, then maybe put %5-10% down and pay over the scheduled payment each month taking chunks out of the principle and saving interest that way...or is that not allowed on mortgage notes?
Posted on 3/12/14 at 10:36 am to jimbeam
quote:
FYI house price range is 375-425k baller
Not in Dallas
Posted on 3/12/14 at 10:38 am to dallastiger55
quote:
dallastiger55
What area?
Posted on 3/12/14 at 10:44 am to PetreauxCat
FHA 15yr Fix for the win.
That payment is no issue for a baller
That payment is no issue for a baller
Posted on 3/12/14 at 11:23 am to PetreauxCat
quote:
Not in Dallas
Price per sq ft in Dallas is lower than in Shreveport on average.
Posted on 3/12/14 at 11:35 am to Haughton99
quote:
Price per sq ft in Dallas is lower than in Shreveport on average.
Not where someone is spending $375k on a house.
ETA - I've got a 3BR & 2 BA home in Lakewood for $375k. It's under 2,000'
This post was edited on 3/12/14 at 11:39 am
Posted on 3/12/14 at 11:44 am to Haughton99
quote:
Price per sq ft in Dallas is lower than in Shreveport on average.
Posted on 3/12/14 at 11:44 am to dallastiger55
quote:Why not just pay cash and avoid all that interest expense?
FYI house price range is 375-425k
Posted on 3/12/14 at 11:45 am to Paul Allen
I'd like to see a link too.
This post was edited on 3/12/14 at 11:48 am
Posted on 3/12/14 at 12:46 pm to dallastiger55
Your estimated PMI each month on a $360K loan ($400K - 10% DP) is roughly $162/Month. I have $60K in a MM that returned $3.25 interest last month.
Posted on 3/12/14 at 1:00 pm to Black n Gold
quote:
Your estimated PMI each month on a $360K loan ($400K - 10% DP) is roughly $162/Month. I have $60K in a MM that returned $3.25 interest last month.
Get that 20% down, and then save the PMI for a cash fund.
You will have a lower interest rates, it will be easier to get a loan, and PMI is really throwing money away.
also, check out ally, I am getting close to 1% on my MM there.
Posted on 3/12/14 at 1:06 pm to Black n Gold
quote:Is that your emergency fund? Why would you have that much sitting in cash? Why not put it in the market?
I have $60K in a MM that returned $3.25 interest last month.
Posted on 3/12/14 at 1:10 pm to RebelOP
quote:
Is that your emergency fund? Why would you have that much sitting in cash? Why not put it in the market?
I'm about to put $40K of it down on a house.
I've always been a fan of putting the 20% down and making extra payments when possible to reduce the principle balance.
Posted on 3/12/14 at 1:12 pm to dallastiger55
quote:
FYI house price range is 375-425k
that will buy one hell of a house in
quote:
Jennings, LA
Posted on 3/12/14 at 1:17 pm to dallastiger55
quote:
it will eat up most of our savings account
What does this mean in terms of numbers? Upkeep on a $400K home can be rather pricey.
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