I try to confine my answers to the parameters of the original post.
Let’s try again…
The original post mentioned putting the money into the home, or putting it into a mutual fund or Berkshire Hathaway…
So given those parameters I like and still stick with my answer.
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Now given the deviations mentioned since my post let’s see…
lending – I agree that bad things do happen. I do not believe it is prudent to sock every last penny you have into the downpayment of a home. I absolutely agree with you there. No matter what your lifestyle is, you should ALWAYS have at least 6 months MINIMUM cash reserves available to deal with life in case of emergencies. Now the post did not state whether this person stuck every penny he had into the downpayment or not. It said nothing about other reserves he may have. While you assumed he put every penny he had (even outside the sale of his other home) into this house, I assumed opposite. So perhaps both of us our correct given our independent assumptions.
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Regarding putting it in a savings account and getting 5%. Please do not conveniently omit that he will be taxed on that interest. Also again, we don’t know what the difference is in what his payment would be, whether he got a jumbo or not. So again, it is speculative without more data to say if putting the move in a savings account or not would be better.
