Originally Posted by La literatura
I absolutely believe in the 80/20 rule mortgage rule and have a near moral objection to not using it as a bare minimum. I'd really like to go 70/30.
Your hopes may be dashed against the rocks of reality when you find out what houses cost.
Also, at current interest rates, you're well-advised to buy earlier rather than later. I've been saying this for years, and been wrong for years, but how the hell can rates get any lower?
I'm not going to pull out a calculator to prove it, but I'd bet that 80/20 at 3.25% interest over 30 is better than 70/30 at 6% over 30. And 6% is low by historical standards. I paid points back in 2000 or so to get my loan DOWN to 7%. That seems absurd now, but back then 7% was very low, historically speaking.
Keep in mind also the tax benefit of deducting the interest. That makes the effective rate even lower. The factor in that the housing market seems to be recovering.
Bottom line -- consider whether it makes more sense to keep waiting/saving to buy a house, or whether you'd be better off buying now before the rates get higher and the prices get higher. You'd need to be saving at a pretty fast clip to stay ahead.
*obviously, many factors here and my crystal ball is no clearer than yours.