Save for Mortgage or Invest?
Save for Mortgage or Invest?
I am renting now but will be in the market to buy a home in that next 2-4 years. With the extra money from work each month, is it best for me to put that away for retirement each year or should I put it into some type of savings account or short term CD so when I buy the home, a large portion can be paid in cash and I will have very little mortgage and interest to repay? Which would be the better long term benefit?
Re: Save for Mortgage or Invest?
it really depends on the rest of your situaiton but;
1) Getting any employer 401K(or similar) match is always a good choice.
2) Saving up enough to have a 20% down payment to not have to pay PMI and to get the best mortage rate is usually an easy choice too.
There is lots of information in the Wiki on this;
http://www.bogleheads.org/wiki/Paying_d ... _investing
1) Getting any employer 401K(or similar) match is always a good choice.
2) Saving up enough to have a 20% down payment to not have to pay PMI and to get the best mortage rate is usually an easy choice too.
There is lots of information in the Wiki on this;
http://www.bogleheads.org/wiki/Paying_d ... _investing
Re: Save for Mortgage or Invest?
Brian,BrianJone wrote:I am renting now but will be in the market to buy a home in that next 2-4 years. With the extra money from work each month, is it best for me to put that away for retirement each year or should I put it into some type of savings account or short term CD so when I buy the home, a large portion can be paid in cash and I will have very little mortgage and interest to repay? Which would be the better long term benefit?
I believe these are 2 distinct and separate goals - BUT it doesn't have to be either/or.
- 1. Save for retirement. Taking advantage of a company match in a 401K, for instance, is a NO brainer. Saving in a Roth IRA is also.
2. Save for a home - the American dream.- For some people a must, for others not essential.
Link - http://www.bogleheads.org/wiki/Owning_vs_Renting - If "a must" for you, as you appear to indicate, the less interest expense you pay, the better-off financially you are.
- For some people a must, for others not essential.
Landy |
Be yourself, everyone else is already taken -- Oscar Wilde