I should put 10% down on my house or 5% and use the other 5 to fix things. I won't be there more than 7 yrs...

Question

Windows are single pane, roof will need to be redone in 4 years, central air and new gas range would be nice. oh yeah my wife and I are both college students. I can't afford to do both.

Answer 1

Nope!  use an FHA loan w/only 3% dn pmt. the difference in a payment amount for that 7% will prolly be insignificant. You're better off putting the difference in a savings acct for emergencies.

Want to really be smart at your young age??   Buy a 3-4 unit building w/FHA loan. Its essentially taking on a part time job (landlording) but hey you've been putting up with 30 yrs of Reagonomics so what's the difference now?  But I digress.

Be very dilligent in selecting your tenants and with some good luck they'll help you prepare for your retirement in 20 -30 yrs when you have the loan paid off!  The ideal scenario is find a detached house w/triplex or duplex in back so y'all can be apart from the tenants!!  And never sell the building unless you're doing an exchange up into a better nieghborhood etc..

Answer 2

find out what the difference would be in the mortgage payment, this might be a deciding factor in the long run.  You can make repairs gradually and find good deals.  You will likely find that 10-20% is best.

Answer 3

Do the 10% down. This will save you a bundle on financing fees and interest rates, not to mention give you more equity in your house.

Thousands of people are foreclosing every day because they have little or no equity in their homes. They cannot sell because they cannot afford to pay down their mortgage enough to cover the loss.

All of these repairs are things you can do over time instead of now. Be smart, and put it into the house first - and then find a way to get money for the repairs. Matter of fact, negotiate it out of the seller's price - it IS a buyers market!

Answer 4

Putting 10% down is a better idea since the problems you've listed don't sound like you can't live without them (except the roof) .... if you're thinking of buying a house that you know has existing damage, try negotiating with the seller for either a credit towards fixing the roof or a better sales price. Plus, you'll get a higher rate with a loan at 95% than at 90% and it's easier to qualify you for a 90% loan as well. Also, since you're not planning to stay more than 7 years, just save up your money in the meantime and fix the roof when you have a chance and give up the other amenities until you buy the house that you plan to raise a family in. You'll also save money on the interest from that extra 5% over the course of 7 years which can end up paying for the roof.