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Forum -> Household Management -> Finances
Help with mortgage/down payment dilemma



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amother
OP


 

Post Wed, Aug 12 2020, 6:21 pm
Here’s my dilemma. We are iyh buying a house that is a bit of a stretch for us. (Not looking to discuss this aspect) with the hope that income (corporate job) will go up iyh. We have saved up money for down payment, and can technically put down the full 20%, but we are thinking of putting down 5% so that we keep a nice amount of money in savings to hold us over and help us supplement mortgage if need be. After working the numbers out, bec Interest rates are low now, monthly payments aren’t so so different, but in my mind every bit counts. Any advice from pple who have been there done that? Should we rather keep cash on hand with a bit of a higher payment or put down more money, have significantly less money left for whatever comes up, but have a lower monthly payment?
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amother
Smokey


 

Post Wed, Aug 12 2020, 6:28 pm
I would put down less and put the difference into savings, to give you a cushion in case your income doesn't go up as fast or as high as you were expecting. Try to get a loan with no prepayment penalty, so if you see things are going according to plan, you can put that savings into the mortgage and lower the interest over the life of the loan.
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amother
Jetblack


 

Post Wed, Aug 12 2020, 6:37 pm
Because mortgage rates are so low now it may pay to hold on to the extra cash. If you need it in the future it may cost you a lot more to borrow it then
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amother
Babypink


 

Post Wed, Aug 12 2020, 7:03 pm
Have you added in the cost of PMI?
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amother
OP


 

Post Wed, Aug 12 2020, 8:43 pm
amother [ Babypink ] wrote:
Have you added in the cost of PMI?

yes, it didn't significantly affect the monthly payment
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chocolatecake




 
 
    
 

Post Wed, Aug 12 2020, 9:24 pm
I would put down the smaller down payment and hold the cash
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amother
Peach


 

Post Wed, Aug 12 2020, 10:20 pm
NJ has a first time homebuyers mortgage where you Can put down as little as 3% and no pmi. Idk where you’re buying, but maybe they also have something similar to that. (This is in Santander bank)
Personally, I would put down less and have extra money around but definitely give an extra payment each year to pay off the mortgage earlier and this save money that way.
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amother
OP


 

Post Wed, Aug 12 2020, 10:21 pm
amother [ Peach ] wrote:
NJ has a first time homebuyers mortgage where you Can put down as little as 3% and no pmi. Idk where you’re buying, but maybe they also have something similar to that. (This is in Santander bank)
Personally, I would put down less and have extra money around but definitely give an extra payment each year to pay off the mortgage earlier and this save money that way.


thanks, but im in new york not nj..
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coloredleaves




 
 
    
 

Post Wed, Aug 12 2020, 10:59 pm
For sure put less down! U can always prepay a little later . Houses almost always have unexpected costs and also having a little extra to paint or buy a piece of furniture or not worry of hours are cut one month makes a big difference. We always give $150 -$200 a month more than the actual mortgage amount towards principle, which over a year equals about 1-1 1/2 months a year of an extra prepayment of the mortgage. I like doing this because it shaves off soem onterwst over the course of the loan and may make the loan end a few years early- But if we couldn't do the extra amount we don't have to. Houses always needed up having unexpected costs and/ or life does!!! And it feels safer to Have a cushion in the bank, especially when u can always pay off some of the loan early little by little if you wanted
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