I am not too sure when exactly am I going to be buying the house. I can safely say that it would be between 2-5 years. However, I have no idea on exactly when. It all depends on market conditions and also on if I am able to move to a better place(I am planning to move from California to Texas or Georgia)
Now, I dont keep a lot of cash at hand(mostly 15-20k). Rest of the money is always invested(401k or personal stock investments) and I would like to keep it that way. Now, a lot of people start saving a lot of cast or hope that they will borrow money against 401k.
I am thinking at it different way
- Instead of worrying about 20% down, I can put 5% down since I am a first time home owner
- Once i know that I have a house I can cover those 15% in first few months and now I am just like other people who did put 20% down
- I did not break my 401k and I did not pull out my investments inadvertently.
Am I missing something? Would NOT putting 20% get me a bad interest rate or put me upside down on my loan? Am I missing any major consideration in my theory?