$100K down payment, much lower mortgage?
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Hi. As stated in a previous question, I'm 20 going on 21 and currently debt free. My car has been paid for, I have no kids/no bills. I make about $36,000/year and I'm interested in purchasing a home within the next few years or at least before I'm 30. Since homes are such a major investment, I'd like to lower my mortgage or completely pay it off as quickly as possible so my other expenses won't be as much of a worry. So, I plan on saving $100,000 for down payment while staying with my parents. I already have around $20K saved up.
I figure if I put $100K down on a $160K home, I could get a loan for $60K resulting in a much lower mortgage payment. Is it really as cut and dry as I am making it out to be or is there more to this? Are there drawbacks/benefits from a large down payment? I've talked to my parents about this, but I'd like to get other opinions.
Also, what are some ways I can increase/invest the money that I'm saving, aside from interest gained in bank account?
$100K down payment, much lower mortgage?Putting a lot of money down on a house. Well I am not in favor of that move at all. Put about 10%-20% down and enjoy the tax advantages as well as the leverage to purchase your house.
Look at it like this. $100,000 in your bank account. 20% down on your house. Now you have $80,000 down to invest in any other investment you desire. 80K is drawing interest at 5.5% for 30 years. You are also paying down the loan amount on your home during the same 30 year period with the tax deductions from the interest on your home loan.
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