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[CapnCy]

I just want to say i LOVE this discussion....keeps me thinking and as many have said..there are so many variables (math, comfort, risk, etc). The fact you all are even thinking this deeply gives me hope...because I see SOOO many people that shoot from the hip and make decisions that are financially hurtful or just digging a hole they don't see..the fact we are all debating on investments/downpayments is great!

 

[mdk2isu]

Yeah I know what you are saying.

I just think making a blanket statement of "first time home buyers can't afford a $200,000 house" is stupid. Maybe they can afford that house more easily than a 2nd or 3rd time home buyer.

Nobody said the bolded, I just said that I wouldnt buy one for that price (implying in the area I live). Also, there is a difference between being approved to buy a $200,000 house and being able to afford a $200,000 house.

 

[mdk2isu]

True that the two are not mutually exclusive, I just believe that the ultimate financial goal should be to grow wealth.

Your second point is not true. If you pay off debt first so you are not in the hole, it takes years to get to that point. As opposed to having debt and growing money that you currently have. The difference between your return and your debt is the value you would have gained. So long it is above 0, it is the better financial option.

Agreed, the ultimate goal should be to grow wealth. I recently read a book written by a very successful business man who made most of his money through real estate. One of the things he said in the book is that people look at their home incorrectly when it comes to growing wealth. Unless your home is producing an income, which is highly unlikely, its not an asset when it comes to building wealth.

Most people include the value of "their" home when they try to determine their worth. There are a couple problems with that though. 1) If you have a mortgage, you dont actually own your home, the bank does. 2) Wealth comes from liquid assets and your home isnt a liquid asset.

 

[Wesley]

Opinions are like a-holes but... Money is so cheap right now, I'd put as little down as I could without PMI being required. If you invest the remaining you were going to put down, I think in 10 years you'll be glad. Unless the whole economy burns down in the next few years, which is possible, but in that case we're all screwed anyway.

Having seen 7-9% as normal and 17% as peak interest, borrow as much money as you can at 3%