My approach to home buying was the inverse of yours, Kristopher. In 2009, one year out of college and 23 years old, I purchased my first home with an FHA mortgage and 3.5% down (which worked out to be about 1% down once you factor in the $8K federal tax credit (“handout”) I received for being a first time home buyer). It was a stretch purchase affordability wise at the time, but fortunately my salary/job situation continued to improve over the years. In 2013, I purchased a second home with a 0% down/ no PMI mortgage and kept my first home as a cash flow positive rental. Today I have a 10,000% + increase (on paper) on my original 1% equity/down payment. The point I’m getting at is leverage can be a great thing, especially when interest rates are historically low and not much capital is risked for potentially very high returns. A more conservative approach and/or all cash home purchase will make more sense when nearing retirement age assuming the equity isn’t needed to fund retirement.
