Which would you rather do????

Question

Purchase a house and use it as an investment with 50% down, apppx, $100,000 or have the money in a CD earning 5% interest,

Which would you do and why???

Answer 1

Neither. Put 20% down and invest the rest. Only put it in a CD if you don't have enough cash in an emergency account. Mortgage rates are still historically low even though they are off of the all time lows.

Answer 2

I would say neither,but i invest in stocks. Stocks are not for everyone and some could careless to learn.

Very easy question with these two options though. If your mortgage rate is say 6% you would be losing 1% by putting the money in a 5% CD.

You would put the money where you would be getting or saving the most interest.

Mortgage loans are some of the cheapest money available.

If you can find an investment just paying 10% that would be better than giving it to the bank for 6 or 7%(mortgage rate). You could be making an extra 3 to 4% more by investing that 100k.

Learn everything you can about investing you could be building a nice nest egg with that kind of money.

Answer 3

Depends on how risk adverse you are. Homes generally appreciate anywhere from 3-7 percent a year, but the housing market is in a rut. You could also rent the property, but is dealing with tenants something you would want to deal with? I presume that if you are looking at purchasing a home or a CD, liquidity is not a large factor. My personal suggestion would be to invest in a mutual fund. Charles Schwab offers no load no fee funds, and finding one that has a annual historical return of 8-12% is not out of the rhelm. For the risk return tradeoff, it is virtually second to none.

Answer 4

If you are buying a residence, go for it. Anything else, um, I'd go shopping CDs right now.