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Started By
Message
Looking for advice re: saving up for a home down payment
Posted on 2/15/19 at 11:05 pm
Posted on 2/15/19 at 11:05 pm
In the semi-ignorant research I've done, I'm leaning towards a high interest savings account ("Marcus" via Goldman Sachs looks legit at 2.25% APY). My situation:
36 years old, saving up for my first home down payment. Graduated with a proper degree at a fairly old age, so I've just recently finished off paying student loans. Have ~$8k left to pay on my vehicle that I will pay off in 3 months, at which point I will be debt free. Have had the car (Civic) for 3 years and it only has 20k miles. I'll drive it until the wheels fall off, so while I know that expenses come up, a vehicle won't be a new significant expense any time soon. Once debt free, I will be putting $2000-3000 a month into saving for a down payment on a home. I get to live in my gamgam's home "rent free" (I pay for the bills and ~$4k/yr in taxes and insurance) until she dies. Once she dies, I'll get ~$15k from the sale of the home, which will go towards the future home down payment.
My gamgam's death will significantly affect how much I put towards the down payment for a home (by ~$1k/month), but I'll still be able to put up $1k-2k a month. I'm willing to take some risks, so the stock market isn't out of the question. If I save up $100k over ~4 years and it turns into ~$80k, I won't be devastated. I can also survive investing in a ~5 year CD today and my gamgam dying tomorrow, but I don't have much to put down right now.
So should I put it all into the stock market? Maybe all high dividend stocks that don't have too much volatility? Mix it up between the 2.25APY saving and stock market? Put it all in savings and forget about it until it's time to buy? Thanks for any advice, love you all.
36 years old, saving up for my first home down payment. Graduated with a proper degree at a fairly old age, so I've just recently finished off paying student loans. Have ~$8k left to pay on my vehicle that I will pay off in 3 months, at which point I will be debt free. Have had the car (Civic) for 3 years and it only has 20k miles. I'll drive it until the wheels fall off, so while I know that expenses come up, a vehicle won't be a new significant expense any time soon. Once debt free, I will be putting $2000-3000 a month into saving for a down payment on a home. I get to live in my gamgam's home "rent free" (I pay for the bills and ~$4k/yr in taxes and insurance) until she dies. Once she dies, I'll get ~$15k from the sale of the home, which will go towards the future home down payment.
My gamgam's death will significantly affect how much I put towards the down payment for a home (by ~$1k/month), but I'll still be able to put up $1k-2k a month. I'm willing to take some risks, so the stock market isn't out of the question. If I save up $100k over ~4 years and it turns into ~$80k, I won't be devastated. I can also survive investing in a ~5 year CD today and my gamgam dying tomorrow, but I don't have much to put down right now.
So should I put it all into the stock market? Maybe all high dividend stocks that don't have too much volatility? Mix it up between the 2.25APY saving and stock market? Put it all in savings and forget about it until it's time to buy? Thanks for any advice, love you all.
This post was edited on 2/15/19 at 11:12 pm
2
Posted on 2/15/19 at 11:24 pm to THRILLHO
Well step one is to remove as many variables as possible so that you can plan better, and establish a baseline
1) take "gamgam" out of the equation. No don't do anything to her, you sick bastard, just don't account for anything related to her (bills, insurance, taxes and sale of the home)
2) have a target for home price, and subsequently how much downpayment you'll need
3) Use the amount you can save, excluding the items in 1, to figure out how long it's going to take you to save for the money in 2).
The answer will dictate what to invest in. And your CDs don't have to be that long, can just do ladder.
Also, depending on the interest rate on the car, maybe throwing money at it now isn't the best thing to do.
1) take "gamgam" out of the equation. No don't do anything to her, you sick bastard, just don't account for anything related to her (bills, insurance, taxes and sale of the home)
2) have a target for home price, and subsequently how much downpayment you'll need
3) Use the amount you can save, excluding the items in 1, to figure out how long it's going to take you to save for the money in 2).
The answer will dictate what to invest in. And your CDs don't have to be that long, can just do ladder.
Also, depending on the interest rate on the car, maybe throwing money at it now isn't the best thing to do.
Posted on 2/16/19 at 5:01 am to THRILLHO
Are you looking at a starter home or something you plan to stay in for several years?
BLUF: I’d slow down and not rush into anything on the house front.
I’ll add my personal experience - I was overly anxious to buy a first house - my new wife and I put down the 20% for a small house but were out 3 years later when we started having kids and needed more space. We sold it for the same price we paid for it, but took a bath when you figure in realtor fees, all the unreimbursed costs that go into a new house (there are lots), and the fact that the first few years of a mortgage builds virtually zero equity.
Why not just keep living in gamgam’s house after she croaks? Sounds like it’s paid for. What’s your personal situation? If you aren’t married and have no kids but think those things could change over the next 5 years, I would be hesitant to buy a home that a future wife is potentially going to dislike or is not ideal for a house full of kids.
IMO, it’s not worth buying a house if you may sell it in the next 5-10 years. Mortgages are so front-loaded on interest, you won’t have built any equity. I’d either stay where you’re at or consider renting if you need to escape the ghost of gamgam after she passes.
BLUF: I’d slow down and not rush into anything on the house front.
I’ll add my personal experience - I was overly anxious to buy a first house - my new wife and I put down the 20% for a small house but were out 3 years later when we started having kids and needed more space. We sold it for the same price we paid for it, but took a bath when you figure in realtor fees, all the unreimbursed costs that go into a new house (there are lots), and the fact that the first few years of a mortgage builds virtually zero equity.
Why not just keep living in gamgam’s house after she croaks? Sounds like it’s paid for. What’s your personal situation? If you aren’t married and have no kids but think those things could change over the next 5 years, I would be hesitant to buy a home that a future wife is potentially going to dislike or is not ideal for a house full of kids.
IMO, it’s not worth buying a house if you may sell it in the next 5-10 years. Mortgages are so front-loaded on interest, you won’t have built any equity. I’d either stay where you’re at or consider renting if you need to escape the ghost of gamgam after she passes.
This post was edited on 2/16/19 at 5:03 am
Posted on 2/16/19 at 6:11 am to NaturalBeam
That’s what I was thinking—why not buy out gamgams other heirs and keep living there? Unless the house has sigbificant issues, it could serve as your starter home and first rental property.
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