I am planning to buy a house. In our region, you have the option to either pay the downpayment in a monthly basis if it is too much of an amount for you. That is the first option.

2nd option is to pay the downpayment in full.

I am gearing towards the first option since I do not have the amount required to pay the downpayment in full. Downside is it would take much longer to make the house have tenants (im planning to rent this out).

With the 1 big time payment, I think I can save up to the required downpayment. Problem is, after 1 or 2 years, the price of the house will go up and that is applicable to the downpayment as well.

I think I can put it simply, cheaper way but longer time. Or a bit more expensive approach but probably quicker.

Besides my limited view on this subject, what other points should I consider?

  • 2
    why can't you have tenants if the downpayment is not paid completely? will you have a title on the property while you are paying the downpayment? – CQM Aug 3 '19 at 1:39
  • 7
    What country are you in? – RonJohn Aug 3 '19 at 2:05
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    How long will it take to pay off the downpayment? How long would it take to save up for it? Don't buy a house for fear of it going up in value - I'm sure there are plenty of houses in your area for sale all the time. – D Stanley Aug 3 '19 at 14:20
  • I don't think you're going to get a good answer without going into more detail about how the split downpayment actually works. It sounds like an interest-free second mortgage issued directly by the seller, rather than another mortgage lender, but there must be some restrictions. – chepner Aug 7 '19 at 13:29

If you pay the downpayment over time, is there interest charged? If so, does that outweigh the benefits?

If you wait, and save up, how much will the price increase? Consider that housing markets can also go down.

If you cannot afford the down payment, it is possible that the rent will not cover your payments, taxes, insurance, maintenance, vacancy time, and more.

If you find the property of your dreams, consider that.

If you find a great bargain, consider that.

If this is just some middle-of-the-road, middle price, goal you have, your risk is high.

If you are an experienced (or inexperienced) landlord, then consider that you do (not) know what you are doing.

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