Question for homeowners...

[gymtime]

I'm in the process of purchasing my first home. My question is on mortgage interest. The more $ I put down, the lower the rate. However, I don't have a great deal of down payment money available. I'm buying before interest rates go back up, plus my lease is up at my apt and I'm too old and pissed for apt living.

So, I can get 7.5% with minimal down. For $1600 more, I can get 7.25. For $2300 more, I can get 7%. I have the minimal in cash, any more I'd have to borrow.

I'm leaning toward just going with 7.5 as it seems like a good rate in general. Suggestions appreciated.

 

[the nature boy]

how long do you plan on keeping the house? if it's like 5 years or so then you're fine. I'd put less money down withe the higher interest rate. Money in hand right now is worth more than cheaper monthly payments down the road if you ask me.

 

[gymtime]

Thanks for the response NB.

I really don't have definite plans. It's a great place and I imagine I'll likely be there a while. I'm not planning to move away any time soon or turn it into a rental. But, at the same time, I don't see myself spending the rest of my life there either. But I think 3-5 years is reasonable.

 

[MattTheSkywalker]

Howmuch does the place cost? How much are you putting down? If you put more down, youmay be able to save on some insurance costs and other things.

 

[gymtime]

Matt, thanks for the response, but I'd rather not get quite that detailed here. I know you can save by putting more down, the problem is I only have a certain amount. Any more I'd have to borrow.

 

[WODIN]

In terms of Interest.

On a 100 K mortgage @ 7.5% you will pay $151,700 + over 30 years. On a 97,700 K mortgage @ 7.0% you will pay $136,300 + over 30 years.

So you save about 15,400 over the 30 year life.

That's if you never plan on moving again.

Plus you have opportunity costs to think about. What else can you do with that 2300 bucks to earn a return on that will make your bottom line better off over the $15,400?

Decisions...decisions....