ZOMG I JUST BOUGHT A HOUSE

[sighing]

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oh yeah and congrats. I'm looking at buying a house in the next 2 - 3 years. Want to save up a nice big downpayment.

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don't bother. 80/20 and use that saved money to buy furniture and home improvement stuff

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nooooooooo

I don't want to get deep into a financial discussion here, but do NOT leverage yourself with a 100% mortgage at the start of a bear market. That would be BAD. If you can't afford a down payment, you don't really need a home anyway.. rent an equivalent house.

(US-only.. I know nothing about the Candadian housing market)

[dmk]

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oh yeah and congrats. I'm looking at buying a house in the next 2 - 3 years. Want to save up a nice big downpayment.

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don't bother. 80/20 and use that saved money to buy furniture and home improvement stuff

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nooooooooo

I don't want to get deep into a financial discussion here, but do NOT leverage yourself with a 100% mortgage at the start of a bear market. That would be BAD. If you can't afford a down payment, you don't really need a home anyway.. rent an equivalent house.

(US-only.. I know nothing about the Candadian housing market)

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meh, havne't been keeping track of interest rates or anything. i did an 80/20 about 1.5 years ago. was good for me then.

[BluffBlank]

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BB

Seriously - put down just enough on your house to avoid the mortgage insurance (that's 25% here in Canada). Put the rest aside to redecorate/renovate/whatever. Any left over after that you can put in an investment, at a higher interest rate than you're paying on your mortgage.


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yeah that's my plan. enough to avoid mortgage insurance. I need to do some looking, but I think its 25% here in the states too.

I also want to pay it with cash somehow. but only because i want to show up with a suitcase full of money once in my life.

[dmk]

its 20 in states

[BluffBlank]

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its 20 in states


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Then I should have plenty in a few years. But i'm in no hurry at the moment. Living with my friend in his house, paying cheap rent and having a blast. The extra money I have left over after the downpayment will go towards a pool table/ITG Machine for the basement.

[Nicholasp27]

i did 80/20

i can afford the payments and also pay 250/month extra onto the 2nd (higher interest) mortgage for the 20 to save lots of money in interest and pay it off faster


i don't care if it's a bear market; i can afford my payments and i went FIXED, which is most important; those that went ARMs that come up when rates are higher and they are upside down in their mortgages will be in trouble


if u can't afford the fixed rate note, then u can't afford the house...also, mortgage interest is tax deductible

if i had the 20% to put down on the mortgage, i'd rather put it into something making interest...after all, why not pay the 6.5% - tax deduction and put the money into the index fund or some other investment that should do better than 6.5% - tax deduction?

[Zurvan]

Did you guys get a loan to pump up your down payment to 20%? Or am I misunderstanding something?

[BluffBlank]

yeah, I think so. I belive you can get a 2nd mortgage right away to make sure you put 20% down to avoid the mortgage insurance?

[Nicholasp27]

yeah, u get 2 mortgages

one is for 80% of the loan
one is for 20% of the loan

that way no loan is for more than 80% of ur value, so u don't have to pay mortgage insurance

u pay a higher interest rate for the 2nd loan, but that's tax deductible and mortgage insurance isn't

[Nicholasp27]

anyway, the 80/20 vs putting 20% down, etc can be debated all day long


the MOST IMPORTANT thing to do is to pay extra to your mortgage principle each month...u can pay biweekly instead of monthly, which means 1 extra payment a year...this will save u a TON of money and a few years of paying the mortgage


example: 200k loan @ 7% interest

payment = $1330/month for 30 years => 279,017 interest paid!!!

extra payment/year = 110.83/month extra = paid off in 27 years => 210,758 interest paid

279,017-210,758=$68,259 saved in interest simply by paying $110/month more