Advice on buying a million dolloar house, please

[SK in CV]

I don’t know what the interest rates are right now on a %600K+ loan, but fixed rate, i’m guessing it’s in the neighborhood of 4.5%. So for every dollar you do NOT borrow, you’re getting an absolutely, positively, better than US govt debt, guaranteed return of 4.5%. If you have a high degree of confidence you can continue to generate 7% return, borrow as much as you can at that rate, you’re picking up 2.5%.

Then there’s also the risk that the market takes another swan dive. Lower down payment, lower exposure in case the value drops below the debt.

Tough call. Great to be in a position to have the flexibility to need to choose.

[KIBU]

I don’t think you are ready to buy a million dollar home yet if you are asking these questions.

How about this, just put in that 200,000 down payment and buy a home that is 400,000. You will thank me about 2 years into paying your monthly mortgages, mello roos, HOA, maintenances (home and wife), utility bills, children expenses and education, insurances……etc.

[KIBU]

I don’t think you are ready to buy a million dollar home yet if you are asking these questions.

How about this, just put in that 200,000 down payment and buy a home that is 400,000. You will thank me about 2 years into paying your monthly mortgages, mello roos, HOA, maintenances (home and wife), utility bills, children expenses and education, insurances……etc.

[KIBU]

I don’t think you are ready to buy a million dollar home yet if you are asking these questions.

How about this, just put in that 200,000 down payment and buy a home that is 400,000. You will thank me about 2 years into paying your monthly mortgages, mello roos, HOA, maintenances (home and wife), utility bills, children expenses and education, insurances……etc.

[KIBU]

I don’t think you are ready to buy a million dollar home yet if you are asking these questions.

How about this, just put in that 200,000 down payment and buy a home that is 400,000. You will thank me about 2 years into paying your monthly mortgages, mello roos, HOA, maintenances (home and wife), utility bills, children expenses and education, insurances……etc.

[KIBU]

I don’t think you are ready to buy a million dollar home yet if you are asking these questions.

How about this, just put in that 200,000 down payment and buy a home that is 400,000. You will thank me about 2 years into paying your monthly mortgages, mello roos, HOA, maintenances (home and wife), utility bills, children expenses and education, insurances……etc.

[GH]

Just make sure it has a large pool, grounds and a gatehouse along with 8 or 9 bedrooms, a ballroom and beautiful tapestries. Oh and a library …

Anything less and whatever the going “price” you are not getting a million dollar house.

Oh yeah, pay cash. The property WILL lose money for at least the next 10 years.

[GH]

Just make sure it has a large pool, grounds and a gatehouse along with 8 or 9 bedrooms, a ballroom and beautiful tapestries. Oh and a library …

Anything less and whatever the going “price” you are not getting a million dollar house.

Oh yeah, pay cash. The property WILL lose money for at least the next 10 years.

[GH]

Just make sure it has a large pool, grounds and a gatehouse along with 8 or 9 bedrooms, a ballroom and beautiful tapestries. Oh and a library …

Anything less and whatever the going “price” you are not getting a million dollar house.

Oh yeah, pay cash. The property WILL lose money for at least the next 10 years.

[GH]

Just make sure it has a large pool, grounds and a gatehouse along with 8 or 9 bedrooms, a ballroom and beautiful tapestries. Oh and a library …

Anything less and whatever the going “price” you are not getting a million dollar house.

Oh yeah, pay cash. The property WILL lose money for at least the next 10 years.

[GH]

Just make sure it has a large pool, grounds and a gatehouse along with 8 or 9 bedrooms, a ballroom and beautiful tapestries. Oh and a library …

Anything less and whatever the going “price” you are not getting a million dollar house.

Oh yeah, pay cash. The property WILL lose money for at least the next 10 years.

[SD Realtor]

I would definitely agree with SK on this one. When you make the decision to buy, you should study the current rates with regards to the historical lows we have seen. If they are still at or near those low levels I would suggest to finance the home if you feel you can make a better return on the balance of the loan. Which I would imagine you can if we are going to be in an escalating rate environment down the road. Look back at the 80s where you could get muni bonds with double digit returns. Then again, if you make the purchase in the future and if rates are much higher at that time, you could see a combination of price drops and higher credit costs that would indicate a more heavily weighted downpayment. In general it is a question that is hard to answer until you are ready to pull the trigger and then what your personal thoughts are on the direction of long term yields.

[SD Realtor]

I would definitely agree with SK on this one. When you make the decision to buy, you should study the current rates with regards to the historical lows we have seen. If they are still at or near those low levels I would suggest to finance the home if you feel you can make a better return on the balance of the loan. Which I would imagine you can if we are going to be in an escalating rate environment down the road. Look back at the 80s where you could get muni bonds with double digit returns. Then again, if you make the purchase in the future and if rates are much higher at that time, you could see a combination of price drops and higher credit costs that would indicate a more heavily weighted downpayment. In general it is a question that is hard to answer until you are ready to pull the trigger and then what your personal thoughts are on the direction of long term yields.

[SD Realtor]

I would definitely agree with SK on this one. When you make the decision to buy, you should study the current rates with regards to the historical lows we have seen. If they are still at or near those low levels I would suggest to finance the home if you feel you can make a better return on the balance of the loan. Which I would imagine you can if we are going to be in an escalating rate environment down the road. Look back at the 80s where you could get muni bonds with double digit returns. Then again, if you make the purchase in the future and if rates are much higher at that time, you could see a combination of price drops and higher credit costs that would indicate a more heavily weighted downpayment. In general it is a question that is hard to answer until you are ready to pull the trigger and then what your personal thoughts are on the direction of long term yields.

[SD Realtor]

I would definitely agree with SK on this one. When you make the decision to buy, you should study the current rates with regards to the historical lows we have seen. If they are still at or near those low levels I would suggest to finance the home if you feel you can make a better return on the balance of the loan. Which I would imagine you can if we are going to be in an escalating rate environment down the road. Look back at the 80s where you could get muni bonds with double digit returns. Then again, if you make the purchase in the future and if rates are much higher at that time, you could see a combination of price drops and higher credit costs that would indicate a more heavily weighted downpayment. In general it is a question that is hard to answer until you are ready to pull the trigger and then what your personal thoughts are on the direction of long term yields.

[Author]

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