Home Buying in Brooklyn>Question Details

Nancy Kipling, Home Buyer in Park Slope, Brooklyn,...

My husband's brother wants to put $200K down on a $500K condo. Isn't this a bad idea?

Asked by Nancy Kipling, Park Slope, Brooklyn, NY Sat Jul 12, 2008

I feel like it would be a bad idea to tie up that much of his money in a down payment. Expert advice?

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Ronda Ching Day’s answer
Every one has their own opinion and comfort level with debt, ratio of cash reserves to expenses, risk and investing. While some professionals can argue for maximum mortgage debt on their principal residence to take advantage of tax benefits re interest deductions as well as having more cash reserves or other liquid investments, others can argue over peace of mind re no debt. The answer can be better answered by your brother-in-law's financial planner, accountant or tax attorney who may have a more comprehensive picture of other details of his entire asset portfolio and personal scenario.
0 votes Thank Flag Link Tue Aug 5, 2008
What part of Brooklyn is he considering? How much of a mortgage he wants to carry would be something to discuss with his accountant because he needs to decide how important the tax advantage of being able to deduct the interest is. If, however, his goal is lower monthly payments, he could achieve that and know that his investment of the large downpayment is a very solid investment. He should weigh that investment against the likely return on other investments. Also the time frame he plans to stay in the condo would be a factor. I live in the Slope, so if you'd like more specific info about buying in this or surrounding neighborhoods I'd be happy to answer any specific questions.
0 votes Thank Flag Link Tue Aug 5, 2008
You need to determine the short and long term goals for your purchase speak with mortgage broker and CPA perhaps
0 votes Thank Flag Link Sat Jul 12, 2008
If he has that much money, he must have a good accountant! He should seek his advice. I tend to agree with you as that amount of money could probably be invested better. It also depends on other factors such as how long is he going to live there.
Web Reference: http://www.liveinakron.com
0 votes Thank Flag Link Sat Jul 12, 2008
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