I have a question about saving to buy a house would you use money that you put into savings or money that Is put into investments? Well basically how would you buy a house through investments or savings?
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Generally, you’d need to sell your investments, transfer the cash to checking, then cut a check for your downpayment.
There’s certainly some investment banks that’ll cut out that middle step and liquidate your assets then cut a check directly to the mortgage provider—as will some savings account custodians.
So far as investing the money you intend to use for a downpayment: be careful! At the very least, be sure it’s in a safe asset (thinking Treasury Inflation-Protected Securities (TIPS), municipal bond funds, etc).
I believe the recommended strategy here would be to set a savings goal once you’re ready to buy a home. That would mean halting investing during that period and instead allocate all of that money to a savings account until you have the 20% for the down payment, then use that to buy the home. Once that is complete you can go back to your regularly scheduled investing plan.
It is not recommended that you sell any of your investments early so that you can buy a home, unless you’re already in retirement.
I made the mistake of cashing out my 401K at age 25 to put a down payment on a condo that I don’t even live in anymore and I’ve been playing catch up for the last few years to get back where I was. Don’t make the same mistake I made!
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