Down Payment Fund

**bjl584** · 04-05-2012, 06:40 AM

It's probably not that simple due to tax write-offs and the amount of equity that your downpayment is purchasing. But, your money if definitely working for you in a sense when you purchase an appreciating asset (hopefully) like real estate with it.

**jpg7n16** · 04-07-2012, 02:21 PM

Originally posted by cashrich View Post

Recently have been wondering if I get mortgage interest @4% say and up until then i was setting aside my down payment fund @0.75% in a MMA savings account.
So when the down payment is made from this fund would you consider now making 3.25% on the down payment?

Sorry, I don't quite get what you're asking.

Are you asking if your mortgage costs 4% and your bank pays 0.75%, would you make an additional 3.25% by paying it down on the loan as opposed to keeping it in the account?

If so, then yes. (4 - .75 = 3.25) though like Brian said, there are tax implications that shift the figures around a little.

If that's not what you're asking, could you please clarify?

**cashrich** · 04-10-2012, 01:40 PM

i was looking for is - if down payment to be considered as an investment which is now giving returns higher than mma(.75%). Earlier it was getting .75% and now it is working to take care of mortgage at 4%. So can we say that it is now giving benefit of 3.25% return?
hope i did not create more confusion

**jpg7n16** · 04-10-2012, 01:49 PM

Originally posted by cashrich View Post

i was looking for is - if down payment to be considered as an investment which is now giving returns higher than mma(.75%). Earlier it was getting .75% and now it is working to take care of mortgage at 4%. So can we say that it is now giving benefit of 3.25% return?
hope i did not create more confusion

Well, no. Earlier it was making 0.75%, now it's saving 4%. So it's benefiting you with a 4% return.

It is however making 3.25% MORE than it used to, but it's making 4%.

**cashrich** · 04-11-2012, 06:00 AM

thanks for your reply, feels better now

Down Payment Fund