jawtin
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Hi...we have recently negotiated a purchase agreement to purchase a home. It is our third home purchase. We sold our previous home with approx $7,500 in proceeds. The loan we are getting next is a USDA backed loan with no down payment required. The purchase price is $123,250. Would it be advantageous to keep our $7,500 or put it down towards the loan even though we don't need to....should we invest the $7,500 on our own? The house is in Iowa. What are the pluses and minuses?? Thank you for the advice!
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Sun Nov 20, 2011 4:03 am |
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littleroc02us
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I would suggest it because it's like putting 6% down on the home and it's a good start. This makes your monthly payments with taxes included around $700 a month, plus you have some equity in the home. Stay in this home for a while and you can start to see the principle dissapear.
Risk comes from not knowing what you're doing. (Warren Buffet)
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Mon Nov 21, 2011 2:24 pm |
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oldguy
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quote:
keep our $7,500 or put it down towards the loan even though we don't need to
I would keep the $7500 and use it to build wealth for your family. You could add it to your 401k, an IRA, a Roth, or a taxable account with a no-load broker.
1. A $7500 investment in an index fund would historically grow to $172,000 in 30 yrs.
2. $7500 put into the house would lower your payment by about $38/m for a total cost of $14,000 over 30 yrs..
I would pay the $14,000 and give yourself the opportunity to earn the $172,000. Congratulations on your new house - I have a relative who did that same thing, a USDA loan on a small house in Iowa - worked well.
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Mon Nov 21, 2011 3:34 pm |
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ting231
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Everyone's eyes are not the same, you can find
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Tue Nov 22, 2011 3:32 pm |
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