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  • House downpayment

    What to do with the savings for 20% house downpayment? Just leave them in a regular savings account with about 2% interest or invest it???

  • #2
    High yield savings or money market.  Want it all to be there when you need it.

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    • #3
      Any money you will need within 3-5 years should not be in the stock market.

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      • #4
        the most important info you dont provide: when do you plan to buy the house?

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        • #5
          Agree with others. Since you're asking the question, the 2% is fine, but when are you planning on buying?

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          • #6
            I don’t have an exact date but I am thinking yes, 3-5 year range probably...trying to deal with my whopping student debt burden first and slowly saving (which is really slow considering I am also trying to max out my retirement accounts!!!)

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            • #7
              Thanks for the feedback!
              I started a savings account with Purepoint which is currently giving almost 2% interest so I will just use that!

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              • #8
                If you have that much in student loans, I wouldn't save up much for a down payment.  I'd put everything towards loans (assuming you aren't going for PSLF) and then use a doctor's loan program.

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                • #9
                  Agree with jhwkr542. I'd put that money towards student loans and then utilize a minimal money down physician loan for the house. There are caveats but, in general, that would be a good plan.

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                  • #10
                    See the following attachment.  Make sure you adjust for your marginal state income tax rate.  I just put my down payment money into VMMXX.

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                    • #11
                      ENT-doc

                      Thanks for attachment. Did you consider adding Treasury Bill for state tax deduction too? Now considering moving large ‘emergency fund’ to VMAXX

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                      • #12
                        You mean VMMXX, right?

                        Didn’t consider T Bills but it’s a thought. It depends on the maturity and need to sell before maturity. I needed something a year out or less, which would seemingly qualify, but there was also a reasonable chance I’d have to sell early. I’d take a hit to the expected interest rate there most likely, and it could be worse if the Fed raises rates more than expected. Just saw too much risk given my needs but it’s certainly worth considering.

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                        • #13




                          If you have that much in student loans, I wouldn’t save up much for a down payment.  I’d put everything towards loans (assuming you aren’t going for PSLF) and then use a doctor’s loan program.
                          Click to expand...


                          I recall that our "doctor" or "Professional" loan was financially more advantagoes to us than a 20% down loan. Yes, we high monthly payment, but we didn't have to wait years to get 20% down, and we could focus the cash on other debt repayment.

                          but... while we did save our our downpayment, we used a high interest savings account. Cash was there when we needed it!

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                          • #14
                            I think you're doing the right thing in saving up cash for a down payment.  But, like others have mentioned, your student loans may be more of a priority right now.  I'm not a fan of doctors loans personally, so I wouldn't recommend that, but I would recommend paying off debt before saving for a down payment assuming your loans are as big as you make them sound.

                            I don't think it's necessarily wrong to put a small amount of money aside while paying off loans assuming  you have a reasonable time line.  Can you pay off all your loans AND save a full 20% in the next 5 years?  If so, I think that's perfectly fine to do.  I wouldn't stretch the loan pay off any further than that though.

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