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A home selling for $120,000, should I put down all my savings on it, or should I take out a home loan for $120,000?

San Fernando, CA |

I see a home for $120,000, and I've saved $50,000 for the down payment. Should I put all of the $50,000 down or should I apply for a $120,000 home loan and save my money for interior and exterior of home care?

Attorney Answers 3


Must be a first time home buyer. (Congratualtions) Banks require to make some downpayment, ustually 10 - 20% and do not make loans for 100%.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also terms and conditions item 9, incorporated as if it was reprinted here.

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Your decision will have significant impact on your tax liability and should be made in consultation with an accountant. The consultation should be a relatively simple matter, as it revolves entirely around your financial goals and "personality."

Ask yourself - do I think that real estate is the best investment I can make with my money or do I think that it has more potential to grow elsewhere. It's also highly relevant what you think is going to happen in the economy at large (nationally, here in California, etc.). Any attorney or person who purports to tell you that they know YOUR answer to that question, is to be avoided. You must inform yourself as to what is going on in the marketplace and then make YOUR choice on how to allocate your funds based upon your financial outlook, Nobody can predict with certainty what the economy will do or know, as you do, your tolerance for risk.

It's also relevant whether this is a home for owner occupancy or a home that you intend to rent to someone else. While I am betting that Mr. Doland's presumption is 100% correct, please understand that how much money you want to put into a property can depend upon your use of that property as it relates to your investment portfolio.

Bottom line: find professionals you trust, read and listen as much as you can, and make a decision that will allow you to sleep at night knowing you've done what YOU should do.

When I respond to a question posted on Avvo, I provide information for a general purpose. In reviewing my answer, you are specifically warned that your use of, or reliance upon any response that I provide would be a bad idea. I do not have all relevant background or facts related to your matter, and am not in a position to give you legal advice. Further, your review, use of, or reliance upon any response by me does not establish an attorney-client relationship between us and does not qualify as a legal consultation for any purpose.

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This is not a legal decision, it is a personal finance decision. Talk to your accountant or financial advisor.

DISCLAIMER: The forgoing comment is for general educational purposes only, and is not legal advice upon which the reader may rely as the commenter has no actual knowledge of the facts of the case, has not interviewed persons or examined evidence, and has not researched the applicable law. The comment is based only on the facts provided, which are extremely limited, and may or may not be true. Complete defenses may prevent the success of any claim. Competent legal advice should always be obtained before taking any legal action or filing suit. Readers employ any information provided herein at their own risk.

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