s/o WDYD with your down payment savings?

[belovedbride07]

The "money lying around" poll reminded me that I've been meaning to ask this...

What did you do with your money while you saved for a down payment? Did you keep it in your savings account? Put it in short-term investments?

We had always planned on putting it in CDs, but we'd have to go so long-term at our credit union (>4 years) to even match what we're earning at ING, so that's out. (We hope/plan to buy in 2-3 years.)

[Deleted]

We're only vaguely saving for a down payment, and the money is in stocks/conservative mutual funds/conservative ETFs. We're okay with some risk, and interest rates on bank accounts are depressing.

[Deleted]

When we started it was in CDs, but that was when the interest rates made it worth not being able to access the money. Once the rates went to crap we put it in a money market account, but we were less than a year from buying at that point, so it was fine.

[SJ]

Sept 8, 2012 11:51:57 GMT -5 v said:

We're only vaguely saving for a down payment, and the money is in stocks/conservative mutual funds/conservative ETFs. We're okay with some risk, and interest rates on bank accounts are depressing.

Same here. We don't even have a timeframe for a home purchase (we aren't planning to buy until we buy a "forever"-ish home) so we don't want to keep it in pure cash.

[M]

I wouldn't invest in anything with money that is earmarked for something like your future home.

[kershnic]

We have ours in 2 different Vanguard mutual funds - one pretty conservative and one moderately conservative. I just can't bear the thought of leaving tens of thousands of dollars in a bank account or CD earning such a piddly amount of interest. We don't plan to buy for probably 3-5 years though, and the plans are kind of amorphous. If the market crashes we'll just rent longer and wait for it to go back up, but I think it would take a pretty dismal market to impact our plans. We have part of our e-fund invested the same way (though do have 2+ months in cash, and have discussed contingency plans of how we would majorly cut our expenses in case of job loss.)

[anna7602]

Nothing brilliant. ING money market account when we were saving to buy our first home and same thing again when we were planning to invest in some land, but were waiting for the right opportunity to come up.

[elizabethann]

Ours is sitting in a regular savings account... we are hoping to buy in about a year.

[Deleted]

Sept 8, 2012 14:25:25 GMT -5 M said:

I wouldn't invest in anything with money that is earmarked for something like your future home.

If we buy an apartment with 20% down (we haven't gotten to the point where we've figured out what percent we'll put down), we're probably talking about a $200,000 down payment (at least). The idea of leaving that much money essentially sitting under our mattress doing nothing for the years leading up to buying is far sadder to me than the thought of losing a part of it.

[whitepicketfence]

We're looking to upgrade in home sometime within the next 5 years. Essentially, that could mean 1 year or it could mean 5; we have no solid plans to move anytime soon but if we find the right house at the right price, we'll jump. We plan to use a portion of the equity we have in our current home and the remainder of our downpayment savings in a money market mutual fund. I didn't want to just leave it in a regular savings account earning next to nothing, but I didn't want to risk investing it either.

[M]

Sept 8, 2012 16:12:20 GMT -5 v said:

Sept 8, 2012 14:25:25 GMT -5 M said:

I wouldn't invest in anything with money that is earmarked for something like your future home.

If we buy an apartment with 20% down (we haven't gotten to the point where we've figured out what percent we'll put down), we're probably talking about a $200,000 down payment (at least). The idea of leaving that much money essentially sitting under our mattress doing nothing for the years leading up to buying is far sadder to me than the thought of losing a part of it.

Sorry, I should rephrase because everyone is different. Those who are not willing to take the risks, understand the risks of losing part or all of it, and are not comfortable with those risks should not invest. Otherwise, I don't see anything wrong with it. There are a lot of people who can't handle losing even a small amount. I've seen it happen a lot and have heard some really sad stories. So my belief is if it's earmarked for something and you're not willing to lose all of it, then don't invest it.

H and I have multiple investment accounts and have really good returns in most of them, but we still keep 1 years worth of efund liquid in a money market account at ....0.000001%? haha. If I wake up tomorrow and all our investments are gone then I'm ok with it because we have one year to get back on our feet and not change our life style.

[vegas]

We have ours in ING but we are planning to buy when we find a house we like. We've been on the hunt for a year and a half. If we don't find something by July we are going to build so there's no point in doing anything fancy with our cash.

[Deleted]

We had ours in CDs, but that was when you could get a decent rate on a >2 year cd.

Now I'd just put it in. Regular savings. It isn't money I'm willing to risk on the market.

[LoveTrains]

Right now mine (DP money) is in a money market account at my local, brick and mortar bank. When I get approval from the seller's bank for my short sale, we will put it into escrow for the sale.

[sillygoosegirl]

It's in a "high interest" online bank account. Of course, that's less than 1% at this point. For a while we had it in CDs, but they don't seem worth it at this point for such a small bonus in interest. If I'd known it was going to take us 8 years to actually choose a house, we would have invested it. We've been thinking we were going to buy within 2 years this whole time, which makes cash better, IMO.

I'm a believer that the amount of cash is really no object, but that time frame matters a lot and I don't want to put money in the stock market if I plan to use it sooner than the next 3-5 years.

[dragonfly08]

Until we pulled it out to start making payments to our contractor, the money we'd been saving for our addition/renovation was in an ING account. It wasn't there long enough that we could take any risks or park it someplace where it was tied up at all.

[countthestars]

It's in ING because we didn't want the risk and didn't have too long before we were ready to buy

[spartychic2010]

Reg. savings