I am 25 and single and have currently saved up ~$70k along with having around $20k in retirement accounts. I also currently have no debt. My gross salary is $75k, and while I will have a raise coming around October (the time I hope to have bought a house by) to $85k, my plan is to use a lot of that to boost my retirement accounts and do not expect must change in take-home.
I am outside the DC area and am currently looking at townhouses that would be in the $225k to $250k range. Assuming the one I buy is $250k, that would require $50k for the down payment plus ~$10k for other costs. I should have another $5k saved up by then, so I would have $15k total saved. While this is enough to be 6 months of emergency savings, I do not think I would be comfortable in the event that something breaks in the home and requires a large amount to fix or I have an emergency.
My current plan is to put 10% down and have $40k savings remaining that I will put into liquid accounts such as high yield savings or laddering CDs. I think I would just feel more comfortable in this case as I do not want to be in a situation where one emergency suddenly means I am "house poor".
I am aware that there is the potential for PMI in this situation, but I feel like if I treated the extra cost as an increase in interest rate, I would still be comfortable with that number. I have also went through what the monthly PITI cost would be with PMI would be, and I was comfortable with the number.
I'm just wondering if essentially sacrificing money to be more risk-adverse is the right way to think about this situation. I know a lot of people in this sub say to only put 20% down, but the people I've talked to have mixed opinions on that. Thank you.
Submitted January 17, 2019 at 08:12AM by gemini116 http://bit.ly/2Rz46Th
