Submitted by bouyentpony5 t3_zls08v in personalfinance
I'm looking for a house in New Jersey and everything is expensive where I want to be. My budget is limited by my income but I have access to cash.
I'm only looking in the 225k range - is it stupid to put down 150k as a down payment?
My idea was to bring down my monthly while still getting a house that's decent. I figure why take a loan out at 7% if I have the funds available?
I know the alternative is to invest the cash and eventually make more money, but I'm wondering if a medium risk investment would even yield more than 7% in the time I'd need it to.
This is all still pretty conservative - I'd still have savings available and would invest (probably at high risk as I'm young). And I only anticipate my income growing once I decide to leave this easy job. I also have a 401k to grow.
I know it's all relative but I'd appreciate any insight into my plan.
Edit: My goodness, thank you for all the feedback! I'm seeing both ends of the spectrum here and will take it all into account moving forward.
I do want to clarify that the reason I'm considering the big down payment is only because I can't afford a decent house with my low income. My answer was to increase the down payment to make my monthly budget feasible while still ending up in a resellable house. My plan is to switch jobs, increase my income, and continue investing any surplus.
It may sound financially irresponsible but the truth is I need to live, hopefully slightly comfortably, and I've been lucky enough to have a good father who left me an inheritance. I have no other debt at the moment and plan on working with a financial advisor.
So I'm seeing that maybe I won't put down as much, but wanted to explain that only putting down 10-20% and investing the rest isn't really an option unless I want to live in a POS. Thanks for all your replies.