I would put down the $400K as long as there is rainy day money. You should have 6 months reserves. For the people that think you should invest that $400K in something else, you are basically saying that everyone should pull thier equity out and invest that money. We have seen what that has done to those poor folks that pulled money out of the primary residences to invest in real estate. There is risk in any type of investment without a guaranteed return. You might as well pay yourself the guaranteed 6-7% and lower your monthly payment. If you have extra money monthly after that, you can invest that into whatever you want. I know a alot of people who lost half of their retirement money in the late 90’s-early 2000’s from their 401k. Since they were too close to retirement they could not recoup their money. The person that put down $400K seams to have done just fine. He bought a condo in 2000 for 200K and sold for 600k. He probably put down 20-40K. For an investment of 40K to get 400K in 7 years seems to be a lot better then a 10% return.
