Personal Finance (Not Investing) • Mortgage Payment Strategy

Hi Bogleheads!

DW and I welcomed a baby and we are going to be moving back home in the coming months. We have found a home for $425k and I'm wanting some feedback from this community on how to handle the mortgage.

I have qualified for a 5% interest rate loan with no points. I originally saved $200k in cash for a home purchase, but I am using a VA loan so I technically do not need to put anything down and I'll be exempt from paying PMI. I am also exempt from the VA funding fee.

I see three possible avenues on repayment of this loan:

1. Put nothing down and invest the down payment
2. Put the entirety of the funds available for down payment down and aggressively pursue paying off the home
3. A combination of the two, maybe 50% on the home and 50% for investments.

I'm leaning towards the 3rd option, even though return wise the 1st option is likely best. There is something to be said for the 2nd option too though.

If it's relevant to the discussion:

My income: ~$440k (DW does not work)
Emergency fund: $100k (separate from down payment fund)
Net Worth: ~$1.1M
Debt: $0
Ages: 29

Thank you for your input!

Statistics: Posted by midwest_bound — Mon Sep 09, 2024 1:57 pm — Replies 2 — Views 194

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