$100K down payment, much lower mortgage?
Hi. As stated in a previous question, I’m 20 going on 21 and currently debt free. My car has been paid for, I have no kids/no bills. I make about $ 36,000/year and I’m interested in purchasing a home within the next few years or at least before I’m 30. Since homes are such a major investment, I’d like to lower my mortgage or completely pay it off as quickly as possible so my other expenses won’t be as much of a worry. So, I plan on saving $ 100,000 for down payment while staying with my parents. I already have around $ 20K saved up.
I figure if I put $ 100K down on a $ 160K home, I could get a loan for $ 60K resulting in a much lower mortgage payment. Is it really as cut and dry as I am making it out to be or is there more to this? Are there drawbacks/benefits from a large down payment? I’ve talked to my parents about this, but I’d like to get other opinions.
Also, what are some ways I can increase/invest the money that I’m saving, aside from interest gained in bank account?
To address Gregorio, you must have mistaken me for someone else. Like I said in my first question (different account, same name) I am indeed 20.
I know that the market is unpredictable, so when the time comes that I reach my goal, I’ll have to adjust accordingly. However, for the time being, I must try and prepare myself with the knowledge I do have of the current market.
I receive a separate income, an allowance of sorts, from the parents, so direct depositing my check from work isn’t an issue. I don’t even see the money. It just goes straight into the bank. Whether to invest it all or the majority of it at one time is my concern. My mom and dad actually purchased a new home last year, so I’ve been taking in their advice as well. Their new house costs way more than my $ 160k target, so I want to avoid downsizing as much as I can when I do decide to purchase a home.
Well, there’s a lot of great information here. Total Money Makeover looks like a beneficial read. Thanks.