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(former)FormerSanDiegan
ParticipantI moved.
Participant[quote=ibjames]if you have to dip in your 401k to get a house I wouldn’t do it.. too much risk
if you can get close to your rent I would go for it, 3% or 10% down..
stay out of the 401k, if you have to dip to get it done it isn’t worth it, I gamble, but I don’t gamble on that[/quote]
I agree with this.
Consider your 401k as a cushion in case of disaster, but do not tap it for the down payment..
My earlier point was that if the cash you have for down payment is all of your assets, then it is not enough, you should save more.
In your shoes, I would consider an FHA loan. That way the money you have saved for your down payment can act as a cash cushion. Personally, I’d rather have 12 months of mortgage payments sitting in the bank than have 10% equity in my house.
We bought our first house in 1996 with 5% down, and that was after the lenders has tightened considerably after the early 90’s bust. I could have scraped another 5 % together but I slept better at night with that 8K in the bank (sounds like a measly sum these days, doesn’t it ?)
Participant[quote=ibjames]if you have to dip in your 401k to get a house I wouldn’t do it.. too much risk
if you can get close to your rent I would go for it, 3% or 10% down..
stay out of the 401k, if you have to dip to get it done it isn’t worth it, I gamble, but I don’t gamble on that[/quote]
I agree with this.
Consider your 401k as a cushion in case of disaster, but do not tap it for the down payment..
My earlier point was that if the cash you have for down payment is all of your assets, then it is not enough, you should save more.
In your shoes, I would consider an FHA loan. That way the money you have saved for your down payment can act as a cash cushion. Personally, I’d rather have 12 months of mortgage payments sitting in the bank than have 10% equity in my house.
We bought our first house in 1996 with 5% down, and that was after the lenders has tightened considerably after the early 90’s bust. I could have scraped another 5 % together but I slept better at night with that 8K in the bank (sounds like a measly sum these days, doesn’t it ?)
Participant[quote=ibjames]if you have to dip in your 401k to get a house I wouldn’t do it.. too much risk
if you can get close to your rent I would go for it, 3% or 10% down..
stay out of the 401k, if you have to dip to get it done it isn’t worth it, I gamble, but I don’t gamble on that[/quote]
I agree with this.
Consider your 401k as a cushion in case of disaster, but do not tap it for the down payment..
My earlier point was that if the cash you have for down payment is all of your assets, then it is not enough, you should save more.
In your shoes, I would consider an FHA loan. That way the money you have saved for your down payment can act as a cash cushion. Personally, I’d rather have 12 months of mortgage payments sitting in the bank than have 10% equity in my house.
We bought our first house in 1996 with 5% down, and that was after the lenders has tightened considerably after the early 90’s bust. I could have scraped another 5 % together but I slept better at night with that 8K in the bank (sounds like a measly sum these days, doesn’t it ?)
Participant[quote=ibjames]if you have to dip in your 401k to get a house I wouldn’t do it.. too much risk
if you can get close to your rent I would go for it, 3% or 10% down..
stay out of the 401k, if you have to dip to get it done it isn’t worth it, I gamble, but I don’t gamble on that[/quote]
I agree with this.
Consider your 401k as a cushion in case of disaster, but do not tap it for the down payment..
My earlier point was that if the cash you have for down payment is all of your assets, then it is not enough, you should save more.
In your shoes, I would consider an FHA loan. That way the money you have saved for your down payment can act as a cash cushion. Personally, I’d rather have 12 months of mortgage payments sitting in the bank than have 10% equity in my house.
We bought our first house in 1996 with 5% down, and that was after the lenders has tightened considerably after the early 90’s bust. I could have scraped another 5 % together but I slept better at night with that 8K in the bank (sounds like a measly sum these days, doesn’t it ?)
Participant[quote=ibjames]if you have to dip in your 401k to get a house I wouldn’t do it.. too much risk
if you can get close to your rent I would go for it, 3% or 10% down..
stay out of the 401k, if you have to dip to get it done it isn’t worth it, I gamble, but I don’t gamble on that[/quote]
I agree with this.
Consider your 401k as a cushion in case of disaster, but do not tap it for the down payment..
My earlier point was that if the cash you have for down payment is all of your assets, then it is not enough, you should save more.
In your shoes, I would consider an FHA loan. That way the money you have saved for your down payment can act as a cash cushion. Personally, I’d rather have 12 months of mortgage payments sitting in the bank than have 10% equity in my house.
We bought our first house in 1996 with 5% down, and that was after the lenders has tightened considerably after the early 90’s bust. I could have scraped another 5 % together but I slept better at night with that 8K in the bank (sounds like a measly sum these days, doesn’t it ?)
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ParticipantI think some others jumped the gun on their advice by saying you should not buy because you do not have enough saved (10% down). They assumed (perhaps correctly) that you had no other assets than the amount you mentioned for a down payment.
Before suggesting that you have no business buying in your situation I would ask how much you have in other assets (401k, IRA, brokerage accounts, etc).
If, for example, you have 2X the amount you have saved for down payment in these other accounts, I would consider buying, especially if the place you buy could be rented out nearly break even or positive cash flow.
The retirement accounts can serve as an emergency backup and if the property could break even you have a contingency plan.
I don’t see a problem buying prudently right now with less than 20% down. I would not be in big a hurry, though.
ParticipantI think some others jumped the gun on their advice by saying you should not buy because you do not have enough saved (10% down). They assumed (perhaps correctly) that you had no other assets than the amount you mentioned for a down payment.
Before suggesting that you have no business buying in your situation I would ask how much you have in other assets (401k, IRA, brokerage accounts, etc).
If, for example, you have 2X the amount you have saved for down payment in these other accounts, I would consider buying, especially if the place you buy could be rented out nearly break even or positive cash flow.
The retirement accounts can serve as an emergency backup and if the property could break even you have a contingency plan.
I don’t see a problem buying prudently right now with less than 20% down. I would not be in big a hurry, though.
ParticipantI think some others jumped the gun on their advice by saying you should not buy because you do not have enough saved (10% down). They assumed (perhaps correctly) that you had no other assets than the amount you mentioned for a down payment.
Before suggesting that you have no business buying in your situation I would ask how much you have in other assets (401k, IRA, brokerage accounts, etc).
If, for example, you have 2X the amount you have saved for down payment in these other accounts, I would consider buying, especially if the place you buy could be rented out nearly break even or positive cash flow.
The retirement accounts can serve as an emergency backup and if the property could break even you have a contingency plan.
I don’t see a problem buying prudently right now with less than 20% down. I would not be in big a hurry, though.
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