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  • First Time Home Buyer Questions

    I found these forums to be an incredible source of information. Truly amazing... I am interested as a first time home buyer in buying a home in.kalamazoo.michigan. It is a nice area which I researched and has the Kalamazoo promise. I want to pay the house off in 2-3 years. Houses are around 200-300k fairly new. I am curious about the following:

    1) for. 2-3 year loan what should my interest rate be can I finance this with near zero interest. how do I acheive the lowest interest rate possible
    2) any reasons why not to.pay off a home as quickly as possible
    3) what elements of the payment process are tax deductible
    4) aside from safe area and good neighbors what else should I look for when I buy a new home? what are some criteria and a check list

    thank you

  • #2
    Originally posted by rick43221 View Post
    I found these forums to be an incredible source of information. Truly amazing... I am interested as a first time home buyer in buying a home in.kalamazoo.michigan. It is a nice area which I researched and has the Kalamazoo promise. I want to pay the house off in 2-3 years. Houses are around 200-300k fairly new. I am curious about the following:

    1) for. 2-3 year loan what should my interest rate be can I finance this with near zero interest. how do I acheive the lowest interest rate possible
    2) any reasons why not to.pay off a home as quickly as possible
    3) what elements of the payment process are tax deductible
    4) aside from safe area and good neighbors what else should I look for when I buy a new home? what are some criteria and a check list

    thank you
    1.) I'm not aware of any 2 or 3 year mortgage loans. Most common mortgage lengths are 10, 15, 20, and 30 year loans. You achieve the lowest interest rate by comparing different lenders.

    2.) You could put that money to better use elsewhere. Paying a home off early is never a bad idea but it may not be the best idea.

    4.) You should try to find whatever you are looking for in a home. You can't really interview your neighbors before you move in. I mean, I guess you could try. A home purchase is personal. What I look for in a home is likely different than what you're looking for. An important reminder is to hire your own inspector and not go with the one your realtor recommends.
    Last edited by CordMcNally; 11-09-2020, 08:44 AM.

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    • #3
      If you’re paying something off in 2-3y, the interest rate doesn’t matter. You could put it on a credit card and be fine. Just go to your local credit union and see what they can do for you.

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      • #4
        No mention of the future.
        • Does this fit you “forever” or “needs” in 5, 10 or 20 years?
        • What are the schools like and trends that might impact the resale time and value if you decide to sell? Schools and unusual layouts can be limiting.
        • You really should do a rent vs buy analysis. If nothing else, it will make you consider the factors besides the original purchase price.
        https://medium.com/@usaar33/an-up-to...r-22d0bf9bbbb5

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        • #5
          I would also add that if you truly plan on paying it off in 2-3 years, you can get a 5/1 ARM mortgage, likely for a better rate than a 30 or 15 year fixed. That said, I agree with other comments, with the current low interest rates you'd be better off putting that extra money in VTSAX or something similar, while writing off those interest payments on your taxes...

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          • #6
            Originally posted by rick43221 View Post
            3) what elements of the payment process are tax deductible
            thank you
            Just interest and property taxes if you itemize but no closing costs. Of note, with SALT deduction limited to $10k and that size of house, you might just be using the standard deduction. In which case, no tax deductions. But free rent in a couple years!

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            • #7
              This is the home for you, or the rental home you were thinking of buying? way different criteria for one or the other. I'll let the home owners continue with the advice on the thread.

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              • #8
                Originally posted by NorCalEDMD View Post
                I would also add that if you truly plan on paying it off in 2-3 years, you can get a 5/1 ARM mortgage, likely for a better rate than a 30 or 15 year fixed. That said, I agree with other comments, with the current low interest rates you'd be better off putting that extra money in VTSAX or something similar, while writing off those interest payments on your taxes...
                5/1 ARM rates today are not better than 15 or 30 year fixed rates.

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