Do u have 6 months of your mortgage payment saved in the bank?

[aanderson]

I am actually closing on a house next week and my lender just wanted to make sure that I had some money invested...just in case. I was able to use my 401k as my "backup" plan. But I also have a big down payment which a lot of first time home buyers don't have.

 

[christy217]

I am interested in how much people save each month, of course this varies with income levels and debt to income ratios.

How many of you agree that it's wise to pay off your house early?

 

[Cowgirl]

Because lenders don't like to hear, "No, but we're paying as much as we can."

That's not what I meant. The only option she gives as a 'no' is that it's not needed. What if you have a couple months saved up, and are working towards the rest?

 

[Vince]

"They" have got to be joking. Who - realistically - can do six months of mortgage payments in savings? Three months is much more reasonable for the everyday person.

Kids just starting out on their first home. Nah. I know I couldn't when I first bought my home. Lived from payday to payday.

 

[BadGirl]

I am actually closing on a house next week and my lender just wanted to make sure that I had some money invested...just in case. I was able to use my 401k as my "backup" plan. But I also have a big down payment which a lot of first time home buyers don't have.

See....I was looking at the 6-month salary savings as something entirely different than money that I've stashed away in my 401K plan.

 

[itsbob]

I am interested in how much people save each month, of course this varies with income levels and debt to income ratios.

How many of you agree that it's wise to pay off your house early?

Depends.. what's the interest on the house loan?

How much interest can you make investing the same money?

If you plan on putting another $200 (equivalent to the magic extra payment a year) a month towards your house payment, to pay it off say 5 years ealier, would you have more money in your investment than what you saved?

If you invested $200 a month for those same 25 years you have over $379,000, if your initial monthly payment was $2,000 a month you would have saved $120,000 in mortgage payments..

Figuring a $310,000 mortgage at 6.5% gives you a 2,000 month mortgage (without taxes or insurance), if you give them an extra $200 a month your loan is paid off 7 years early so the total saved in payments (Principal and Interest only) would be $168,000 OR you could invest at 12% interest (fairly conservative) and in the same 23 years $294,611

AND at 30 years, you'll have your mortgage paid off AND $705,982 in savings.

 

[kwillia]

See....I was looking at the 6-month salary savings as something entirely different than money that I've stashed away in my 401K plan.

I don't consider my 401k to be in existence. I definitely don't consider it to be a fall back plan because if that is my "emergency fund" and I have to tap into it... who the heck is going to take care of me in my retirement...

 

[Vince]

who the heck is going to take care of me in my retirement...

Social Security.

 

[BadGirl]

who the heck is going to take care of me in my retirement...

I would take care of you, but I'm older than you and will probably require YOUR financial assistance when I hit geezerhood.

 

[DoWhat]

How many of you agree that it's wise to pay off your house early?

It depends.
Age?
Income?
Children?
Pets?
Race?
Location?


Kidding.

It all depends on your total income.

 

[DoWhat]

Depends.. what's the interest on the house loan?

How much interest can you make investing the same money?

If you plan on putting another $200 (equivalent to the magic extra payment a year) a month towards your house payment, to pay it off say 5 years ealier, would you have more money in your investment than what you saved?

If you invested $200 a month for those same 25 years you have over $379,000, if your initial monthly payment was $2,000 a month you would have saved $120,000 in mortgage payments..

Figuring a $310,000 mortgage at 6.5% gives you a 2,000 month mortgage (without taxes or insurance), if you give them an extra $200 a month your loan is paid off 7 years early so the total saved in payments (Principal and Interest only) would be $168,000 OR you could invest at 12% interest (fairly conservative) and in the same 23 years $294,611
AND at 30 years, you'll have your mortgage paid off AND $705,982 in savings.

You just made my head hurt.
Thanks Buddy (New Harley Dude)

 

[Chain729]

"They" have got to be joking. Who - realistically - can do six months of mortgage payments in savings? Three months is much more reasonable for the everyday person.

Guess I didn't read the question right... I had almost double in a MMA w/checking when I bought mine (after closing). Most of it has either been invested or used to pay for things that came up since then (lawyer being one). I still have over 6 months in what I consider- in today's computer banking/brokering age- to be easily liquidable should the need arise (which excludes 401K).

There's no way in hell I'd keep that much in a savings account. I lived extremely utilitarian until I bought the house and for two years I made over 20% of my base pay in OT (which I didn't even think about- just banked it).

Now, due to a house, kid and other circumstances, I don't see that fall-back nest egg being there in a year.

 

[Christy]

We had zero savings, 401K etc. when we bought our house, we went VA. I'm glad we bought when we did, I was terrified then with our house payment, now it's a drop in the bucket compared to what we'd be paying if we had waited.

 

[tater]

What is this savings you all speak of?

 

[SEABREEZE 1957]

We had minimal cash savings (maybe 3 months worth of house payments), went conventional VA, used our stocks, 401K as 'assets' and got a fantastic deal with Countrywide. Dennis Bridgett (sp?) was the loan officer. I highly recommend you contact him if you are looking to buy a house.