Funding for house downpayment

Jun 17, 2018 26 Comments

I require 140K downpayment for buying house. Have the following assets (excluding 401K as I don’t want to touch it). The house price is 700K so I am paying 20% downpayment.

85K cash
25K Stock of Altaba (Yahoo)
80K mutual funds (S&P 500)

1. Can anyone advise which ones should I sell to get to 140K.
2. How much cash is REQUIRED by bank? Assume mortgage payment of $3K.
3. How much cash is RECOMMENDED?

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TOP 26 Comments
  • Intel JazA25
    Consider a loan from your 401k. You will be paying the loan back to yourself and the interest as well, and terms will be better than a HELOC. I would consider funding a part of your down payment through that. Bank will expect you you have 4-6 month of payment in your account post purchase - this really varies based on the time of the year and the bank. Use most of your cash and 401k loan and use the sticks for the rest
    Jun 17, 2018 3
    • VMware shYC04
      This is such bad advice. And lenders will ask whether the money was borrowed from a source such as 491k
      Jun 18, 2018
    • Intel JazA25
      Yea sure. And what make you think that matters? Those are your assets and you take the liability of taxes/penalties if your don’t repay - the major flip side to this that the loan term will be 5 years or so which would make it a large monthly payout
      Jun 18, 2018
  • Facebook public
    Lenders only care about income and down payment. Ideally you have 20% plus closing costs. Keep in mind you will have to pay taxes on sold investments.
    Jun 17, 2018 0
  • Citibank / Eng id 10 t
    Hate to say this but based on what you’ve provided you should not buy this home. You should be looking at something in the $350k range or keep renting a save More. Also you should not have to put down more than 10%. 20% allows you to avoid PMI. Don’t sell long term investments for a down payment.
    Jun 17, 2018 7
    • I’ll recommend going south of San Jose. Know a few who bought townhomes in ~600k. Don’t go over your means at all. Either wait or lower your budget.
      Jun 17, 2018
    • OP
      If so live in South San Jose I cannot work in SF at all. Hayward gives me that option.
      Jun 17, 2018
  • Tableau krxi15
    OP, i was in the worse condition than you and still went for it and now I am so glad I did.

    You don't need 20% for down these days, 15% should be good enough to get decent rates and minimal PMI. That is what I have done and my PMI is <100.

    If PMI is not a concern for you then you can even go 10% and secure a loan.
    Jun 17, 2018 5
    • Tableau krxi15
      You need refrigerator, washer, dryer, TV, other household things like dinning table, floor mats, trash cans, security cameras,security system etc.

      Utility bills are a lot lot higher than rental, garbage, sewage, water, electric, gas and internet. Also dont forget insurances and closing cost. Property tax for your house will come to 10k.

      And if you do get the loan for less than 20% then why do you wanna give away your liquid cash? Mortgage interest is very low, compared to what you can earn from your assets in current market.
      Jun 17, 2018
    • Utilities are monthly expenses, pre-planning not needed. If fridge not left with house then Craigslist, same with the other stuff but not needed.

      Lool trashcans aren't provided by the government there?
      Jun 18, 2018
  • Google / Eng
    himom

    Google Eng

    PRE
    LinkedIn, Facebook
    himommore
    Sell all of your Yahoo stocks. Those are the most risky. Make sure you have enough money set aside for property tax, closing cost, and capital gains on your sold stock.

    Keep as much cash as you can, since that will be your emergency fund.

    I think you barely have enough. Hopefully you really like the house.
    Jun 17, 2018 0
  • The minimum down payment depends on the property you are trying to buy and your personal qualifications (debt to income ratio and credit score mainly). It sounds like you are buying for the first time so maybe meet with a Realtor and they can put you in contact with lenders that be best suited for your particular scenario. There are sometimes incentives to purchase in certain Census Track Codes which would reduce your down payment through certain lenders. In addition to your down payment you will need closing costs, again varies by the property type and city/county mainly. If you need to talk with a couple of Realtors to make sure that you are being advices well then maybe that's a good option too.
    Jun 17, 2018 0
  • Adobe trust_moi
    Need more info. Is 140k 10% or 20% Down payment?

    If it is 20% then consider taking second loan (Heloc) by reducing your first down payment from 20% to either 10 or 15%

    S&P has. 4-5% growth YOY.
    Do you see altaba grow that way? If yes the split half and half
    If not your choice is clear.
    Jun 17, 2018 2
    • OP
      140K is 20% down. Why should I take loan for downpayment if I have 20% saved?
      Jun 17, 2018
    • Adobe trust_moi
      Because you will need ready cash after buying home to buy new furnitures and fix issues if there are.

      You ll also need them for paying property taxes

      Don't use all the cash you have. Take a loan instead.
      Jun 17, 2018
  • This comment was deleted by original commenter.

    • OP
      I will buy the house surely. Don’t mind loosing potential gains in stocks.
      Jun 17, 2018
  • Mentor Graphics gatorman
    Don’t buy a 700k low income housing property. You won’t be happy. It will also require many repairs
    Jun 17, 2018 0

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