I had a question I wanted to float to the group. Since this is a mortgage thread, I thought this would be a good place to put it, even if not the OP's question.
My wife and I were starting to build up to buy a home. Yes, yes, I have argued on here a few times about renting versus buying and usually came down on the renting side, but a higher power intervened and it looks like I am going to buy something.
Yours truly along with my wife's husband were put on trial. I was going to lose either way.
As some of you might know, housing on the East Coast is in another universe than from Iowa or even the more expensive parts of the Midwest. Thing is, we can afford to save enough up to make a 20% down-payment (to avoid PMI) on even housing out here.
Which brings up two questions...
(1.) Should we do that? Is it worth avoiding the additional monthly payments and to burn off that much principle fast, or better to use the cash somehow else?
(2.) As I said, we would have to save it up first, which would not take all that long (not trying to brag here, but we are two high-income professionals in a high-income area with no debt or major expenses or kids yet, typical yuppie DINKs) to do. However, how should we store it in the meantime for 1-3 years? Cash? An index fund? Some other short-term security? I would have to lose out on any interest or return, but I am kind of worried about downside risk with equities when we are dedicating it to a specific purpose.
If it was long-term and earmarked for retirement or college someday, that is one thing, but I am not sure how to store a large amount in a semi-liquid fashion in the medium-term.
Thanks!