http://www.publicradio.org/columns/marketplace/gettingpersonal/ en-us Copyright 2008 Thu, 03 Jul 2008 11:38:49 -0800 http://www.sixapart.com/movabletype/ http://blogs.law.harvard.edu/tech/rss Question: This is in regards to a questioner on a recent program (last weekend, I think). She was terminally ill and wanted to know the requirements for early withdrawal from her 401k. My sister is in a similar but slightly different situation, and I wanted to pose the same question for her. Her circumstances are as follows: She is over 59 and a half (just). She has cancer that is expected to be terminal in less than two years, although she is undergoing chemotherapy. She... continues to work at a limited level. She has had to quit her primary income source.... Her income is about 1/5th what it was, and her other financial resources are now all but gone. She has something like $5,000 or so scattered among a few retirement-type accounts -- 401k mostly, but I believe a SEP-IRA as well. Can she withdraw this money without penalty in a lump sum? It would sure help matters. Anonymous. Alexandria, VA. Answer: I'm sorry that your sister is so sick. On the financial front, since she is over 59 ½ she can withdraw the retirement money at any time without penalty. She'll pay ordinary income taxes on the sums she takes out of the retirement plans, but since her earnings are down the tax hit should be relatively small. Here's the link to the question and answer on terminal illness from an earlier show: marketplace.publicradio.org/display/web/2008/06/27/getting_personal/]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/07/terminal_illness_and_retiremen.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/07/terminal_illness_and_retiremen.html Retirement Savings Thu, 03 Jul 2008 11:38:49 -0800 Question: Dear Mr. Knows-a-lot-about-financial-stuff, My niece and her new hubby are looking to buy a house, and are well-qualified for a mortgage. She does not like the idea, however, of all of their payments going to a bank and would rather "keep it in the family" by arranging a private mortgage with me. Are there established reliable brokers who can manage the loan as if it were an arms-length standard mortgage that just happens to use me as the lender? How much work would I personally have to do in the long run? ;-) I can well afford the up-front loan amount and have good confidence in their financial discipline to pay. Also, I have an excellent accountant who is professionally conservative but used to goofy financial arrangements. Sincerely, Noelie. Austin, TX. Answer: It isn't a goofy financial arrangement if you have the money and you trust your niece. However, there's the wisdom of the financial ages behind the standard caution of don't lend substantial sums of money to family members. It can lead to a lot of heartbreak. That said, if you're still determined to go ahead with the loan, it's easy to do. There's no need to work with an outside broker. Instead, hire a knowledgeable real estate lawyer to both draw up a legally binding loan contract, and to make sure that the title and other ownership issues are dealt with properly. Charge your niece a market rate of interest on the mortgage (so you don't get into any trouble with the IRS). Have her set up automatic monthly payment from her checking account into yours. The home is your collateral if she ever stops making payments. Good luck. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/07/a_diy_mortgage.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/07/a_diy_mortgage.html Housing Wed, 02 Jul 2008 09:53:23 -0800 Question: Hi Chris! (please withhold my name if you use - thanks!)... I am 36 years old and about to marry for the first time (my fiancé is also 36). He owns a teeny home which he purchased 4 years ago (a duplex) that he will sell and we would use the equity to purchase a larger home since we feel we'll soon outgrow his place if we have a child, and it's actually quite tiny for even the two of us. I am strugging with whether or not we should buy. The mortgage payment (with taxes, etc) on the house that we are interested in purchasing would be about 30% of our combined gross incomes. I have heard that 25-30% is what you shoot for. Everyone tells us to "stretch" and buy more house that we think we can afford, assuming that our income will increase over time. Here's the catch -- I am self-employed, and so if I have a child and stay home for even just 6-8 weeks, I will lose money as I don't have any "paid time off." Plus, being self-employed, my salary can potentially vary (though it hasn 't over the last 2 years that I have been doing this full-time). Is it a mistake to take this on when we know that my income will *decrease*? My fiancé will probably get annual raises of 5-6%.... Thanks so much! Alexandria, V. Answer: Don't do it. DON'T DO IT. Among the worst pieces of conventional financial wisdom is to "stretch" to buy a bigger home. It's a recipe for money trouble. You have a lot going on in your life. Getting married. Starting a family. You're self-employed. What if your husband-to-be doesn't get 5% to 6% raises, but only 2% to 3% during a recession--or even no raise? Why add mortgage stress into the mix? What's more, when you buy a bigger house you take on more than a larger mortgage. Property taxes, heating bills, air conditioning, and all the other costs that go into running and maintaining a home are higher. I'd rather that you put more money into savings--from cash to stocks and bonds--rather than into bigger mortgage payments. No, I would stay financially conservative so that you can focus on married life and your work. If your incomes go up, you and your husband can always move to a bigger home. But by then you'll have built up the strong foundation of a healthy balance sheet. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/07/a_bigger_mortgage.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/07/a_bigger_mortgage.html Housing Tue, 01 Jul 2008 18:05:53 -0800 Comment: I am listening to your answer to the parents who have a son going to Prague for fall semester. I have two daughters who have just graduated from college with no debt and no credit card. Now they are on their own - for real - for the first time in their lives with great grade point averages, but with NO CREDIT HISTORY. My husband and I thought we were protecting our daughters from lenders by them not having credit cards, but we were actually handcuffing them. Since graduation, they had trouble getting apartments and they found it difficult to establish themselves in their new cities. I hardily endorse the "get a credit card" answer you gave the e-mailer, and don't chicken out with the pre-paid card. As I understand it, they don't really work to help establish your credit record. If I had it to do again, I'd get them a card when they were sophomores or juniors and have the very long talk about not spending more than they can pay, but use the card regularly and pay off immediately. Thanks, Lynn. Response: Thanks for your comment. I'm posting it because you offer a different--and useful--perspective. A lot of people agree with you. The advantage of a secured card in this case is that it prevents the novice user from getting into trouble while allowing the parents to rest easy that their student is financially covered in an emergency. (If a secured credit card from one of the dominant card issuers is regularly used the payment history will be reported to at least one of the major reporting bureaus. It's a "safe" way to build a credit history, and usually a secured card can be exchanged for an unsecured one after a period of time. The bigger issue here is to stay away from secured card scams.) However, since the credit card companies make it so easy, most college students should get an unsecured credit card right before graduation. On the more general question of students and credit cards, the reason why I lean toward the more conservative side of the equation is that the evidence shows too many college students are taking on too much credit card debt. Yes, students may have a credit history and a credit score. But a number are starting out their work careers with a debt burden that can hamper their financial freedom. I'd rather students graduate with no credit card debt and no credit score. They will have a lifetime of earnings to build up their credit history. I know it isn't fashionable, but I am still troubled with anyone having a credit card (except for emergencies) without earning an income. Of course, parents know their children. And for some getting a card early and using it often is the right choice. For others, caution is the better course of action. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/students_credit_cards.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/students_credit_cards.html credit cards Mon, 30 Jun 2008 12:46:14 -0800 Question: I'd like to first start off by saying I love show and could listen to it for 3 hours a day if it were on and I had the time. Honestly, how can someone like Chris know so much about such a wide range of financial topics? I've heard a lot recently about the July 1st deadline to consolidate students loans to a very, very low rate and was wondering: 1) What personal information do I need to gather? and 2) What website should I go to. I usually am at work when the show is on, so I only get to listen to bits and pieces, but an e-mail or any response would be greatly appreciated. Thank you! Wade. Duluth,MN Answer: I'm glad you enjoy the show. On the student loan front, there's no need to rush. However, anyone with variable rate student loans should mark July 1 on their calendar. If you consolidate after that date you can lock in interest rates 3 percentage points less than the current 7.22%. That's a huge savings over the life of a loan. So, if you're thinking of consolidating, wait. The student loan consolidation market has shrunk with the credit crunch. Hopefully, it will open up again soon. What's more, on July 1 the clock starts ticking on the new federal program that forgives remaining federal student loan debt after 10 years if you make all your payments on time and work for the government, non-profit, or other qualifying job. A nice summary of what will happen on July I, 2008 is on the website Project on Student Debt at www.projectonstudentdebt.org. The specific page is http://projectonstudentdebt.org/july1-2008.vp.html. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/july_1_2008_and_student_loans_1.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/july_1_2008_and_student_loans_1.html Paying for College Fri, 27 Jun 2008 15:10:46 -0800 Question: Ok Chris Farrell (or associate) I have a question that may give you a monetary migraine. I have approximately $7,000 in credit card debt (yes...shame on me). To top it off (and this requires that you be sitting down) the interest rate is 29%! I missed a payment two years ago on a different card that is now paid off however that one missed payment lead to my interest rate to be changed from 11% to 29%. My question is this: There are many offers that come in the mail for credit cards that will transfer the balance and not assess interest for 6-12 months (0% interest). Now, after this period the interest rate stated is up to 29% (which is the rate I am at now). My thought is that I have nothing to lose interest-wise and could make some head-way into decreasing this debt during that period. Should I do it? or to sharpen the question... would you (if you were in this situation) do it? Please advise and inform me if my rational is misguided. Thanks. Kris, Pontiac, MI Answer: There's no need for me to be sitting down or you to be ashamed. Yes, you have a lot of credit card debt, but so do a lot of people. I've seen a lot worse numbers. But I am outraged at credit card companies that boost interest charges to 29%. Two things: First, shifting to credit cards with 0% interest for 6 to 12 months is a smart financial move in your circumstances. The gap between 0% and 29% is so large that you'll save money. Hopefully, you will qualify for the 0% interest. Second, the key to this strategy is paying down the debt steadily. Once it is gone don't let it creep up again. The zero rate cards are a tool to make it easier for you to accomplish that goal: No balance on your credit cards. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/o_interest.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/o_interest.html credit cards Thu, 26 Jun 2008 18:45:09 -0800 Question: I've accumulated some credit card debt (due to a drop in planned income) in the last 6 months. At this point, I have some money in a savings account that could pay off that debt but it would empty the savings account. I've been reluctant to do that because it's my emergency fund (car breaks down, some major home repair) - but since I haven't been able to make a lot of headway on the credit card debt I'm starting to question that choice. Is it worth the risk of emptying the account to pay off this credit card debt? Both the debt and the savings account are less than $2K at this point. Sheri, Rochester, NY Answer: In theory, there shouldn't be much of a difference between having $2,000 in a savings account and draining that bank account to pay off a $2,000 credit card bill. A credit card without any debt is a form of savings. That's in theory. Psychologically, most of us like to have cash in the bank even if we are carrying some debt. I think many people find it easier to pay down debt if they can see some improvement in their savings. How about a compromise? Set up a time period, say, 6 months to a year, and divide your debt by the number of months. This way, you'll pay off the debt within a reasonable period of time with a combination of income and savings. Hopefully, you'll be able to keep something of a savings cushion. And with time frame the interest burden or penalty won't be that high.. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/credit_card_debt.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/credit_card_debt.html credit cards Thu, 26 Jun 2008 04:30:26 -0800 Question: Do you have a suggestion for a book on basic investing? I'm looking for something that covers the basic investment vehicles: stocks, bonds, CDs, and cash. I want to know how to analyze each type of investment and how best to determine and allocate risk. Thanks! Grant. Anaheim, CA. Answer: I've swiveled in my chair to look at some choices for you. Of course, I can't just pick one. But here are several choices. I'd go to the library or bookstore and see which one you like: A Random Walk Down Wall Street by Burton Malkiel. It's a classic. Malkiel translates the quantitative, highly abstract insights of modern finance theory into everyday language. He taps into the colorful vein of financial market history--booms, busts, bubbles, and castles in the air--to bring alive the capital markets. Lots of practical investment advice, too. Informed Investor by Frank Armstrong. A former pilot, Frank sold insurance, became a broker, and, eventually, independent investment adviser. He detests Wall Streets steep commissions and high fees. He's a strong advocate of indexing. He is wary of Wall Street's insatiable appetite for picking the pocket of the individual investor. Dull, but comprehensive. Stocks for the Long Run by Jeremy Siegel. First published in 1994 (there have been later editions), it remains one of the best introductions into the pluses and minuses of investing in stocks over long periods of time. He also deals with other investments. Smart and Simple Financial Strategies for Busy People, by Jane Bryant Quinn. You can't go wrong with the Queen of Money. Written with wit and wisdom.. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/book_recommendation_on_investi.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/book_recommendation_on_investi.html Investing Tue, 24 Jun 2008 12:32:09 -0800 Question: This morning, rushing my kids to get them ready for school and myself to work, I overheard someone talk about borrowing from his/her own social security account, interest free. Please, Is there such a thing? Is there a website? I don't have a crises, though I lived below Houston and to the west of Christie Street when 911 happened, but I never looked for any help related to that. I'm a person in lots of debt, credit card(divorce) and student loan, single mother with two kids trying to start a new career, possibly start a small non-for-profit cultural center - lounge in my neighborhood. A loan such as this could be the answer. Thank you, Malu. Brooklyn, NY Answer: What you heard was a report by Bob Moon. He looked into what can be called the Social Security "do-over." But it doesn't involve borrowing from your Social Security account. When people retire early, say, at age 62, they take a reduced monthly benefit. Well, it turns out that you can change your mind, reapply, and get the bigger payments that go to those who wait to collect benefits. The catch? You must send the government a check covering the benefits you've been paid (But that payment is without interest or adjusting for inflation. That's probably where you heard the word "interest".) For others that are interested in the Social Security do-over, they can check out the website of Laurence J. Kotlikoff, economics professor at Boston University. He's also the head of the financial-planning software company ESPlanner. (It's at www.esplanner.com.) For instance, he ran numbers for me a while back for a couple who retire at 62, have $300,000 in savings, and an additional $100,000 each in retirement assets. They want their money to last until they're 100. If they apply for benefits at 62, each gets $17,921 a year. Fast-forward eight years. Had they waited until age 70 to file, they would get $31,005 each, for a total of $62,010 a year. To get those higher payouts now, they'd each write a check for $118,957. That's a hefty sum. But the cost of getting that same payout by buying the cheapest commercial annuity would be 40% higher. When you include earnings from the couple's other assets and factor in their 30-year time horizon, Kotlikoff calculates that their annual aftertax spending can go from $58,765 to $70,420. Your concerns are far different. I would suggest that you get in touch with the National Foundation for Credit Counseling (NFCC) to deal with your debts. It's the largest national nonprofit credit counseling organization. Their website is www.nfcc.org. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/social_security_doover.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/social_security_doover.html Debt Social Security Mon, 23 Jun 2008 15:34:23 -0800 Listen to this week's segment]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/questions_answered_on_air_for_5.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/questions_answered_on_air_for_5.html Fri, 20 Jun 2008 14:10:11 -0800 Question: Is there a source to which you can refer me that would state the average interest rate of the One Year T - constant maturity, over the past decade or two? We currently have an adjustable rate mortgage tied to the 12 Month Average of the One Year T, Constant Maturity. At present, the rate is not so bad, but we are all too aware it goes up and down. I am wondering if there may be an advantage to sticking with what we have, knowing that sometimes it will take a bigger bite out of our budget than others. In essence, if you can weather the peak interest rates, is it worth sticking with an adjustable rate for the valleys that are also part of the ride. Thanks. Brian, Pacific Grove, CA Answer: The data is produced by the Federal Reserve Board. You can find both current and historical data at www.federalreserve.gov/Releases/H15/. Another data source with some nice tables is at www.moneycafe.com/library/cmt.htm. I don't dislike adjustable rate mortgages. I've had two, and both worked out well. But I now prefer the certainty that comes with a fixed rate mortgage. I think it's a better financial product for most people. But not all. In essence, the question about an adjustable rate mortgage comes down to 1) how healthy is your cash flow and 2) if the financial world conspires against you and interest rates go up sharply over several years how deeply will the higher mortgage payments affect you? You're weighing the advantages of lower interest rate payments against the risk of higher payments. Is that a reasonable gamble for you to take? The big advantage of a fixed rate mortgage is that you always know what your payment will be. It doesn't matter if interest rates go up. However, if rates do tumble, you can always refinance at a lower rate. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/adjustable_rate_mortgage.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/adjustable_rate_mortgage.html Housing Fri, 20 Jun 2008 12:32:26 -0800 Question: My husband and I will receive about $50,000 inheritance. He wants to use the whole sum to pay down our mortgage. I argue that we should pay down the higher-interest credit cards and car loans (about 6k in the former, 28k in the later). He argues that the sooner we build more home equity, the better. I say that we're losing lots of money on these higher interest products. I'm right? He's right? Split the difference? We're in our 40's, both employed in education, and have (hopefully) good retirement accounts. Nancy, Columbus, OH Answer: First of all, in this case neither of you is wrong--or right. You'll be better off financially whether you decide to pay down the mortgage, get rid of credit card debts and car loans, or compromise on a mix of the two strategies. The bottom line is that you're getting rid of debt and your household balance sheet will be healthier. That said, I'm with you on this one: From a financial point of view the best use of the money is to get rid of the credit card debts and car loans. Both have a higher rate. Now, you'll still have some inheritance money left over if you eliminate the short-term debt. You could put that toward principal on your home. Or, in light of the recession, you might want to consider setting it aside in a safe place just in case you need it. You can always invest it in your home once the economy looks better. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/what_debts_to_pay_off.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/what_debts_to_pay_off.html Debt Thu, 19 Jun 2008 10:46:56 -0800 Question: I am 22. I have no debt. I currently have 6500.00 in savings & add about 300 a month to this account. I want to make my savings "work for me". What steps should I take ?? I want to start practicing good money habits now...please help. Christina. Conway, MA. Answer: You're already doing better than many (most?) people. You're saving, and you want to learn more. That's a terrific combination. What I especially like is your phrase "practicing good money habits." It's so easy to get lost in the technical and financial complexities of managing money when what really counts as sound personal finance is developing a handful of good habits. That means save for retirement in a tax sheltered pension plan with a well-diversified portfolio. Build up with automatic withdrawals from your checking account a nest egg that can be used for everything from surviving a layoff to putting a down payment on a home. Own your own home. Don't take on credit card debt. Keep good financial records. Insure your loved ones. Keep it simple, always. Of course, managing money easily gets much more intricate. For instance, does it make sense to open up a Roth-IRA (it usually does) to the advisability of purchasing a variable annuity contract (the answer is no for most people). Still, the essence of good money management is good habits. To learn more, there are two books I've recommended before that offer plenty of insight and wisdom. They also have the virtue of being short. The Only Investment Guide You'll Ever Need, by Andrew Tobias. It came out decades ago--1978. But it has been revised many times since then. Tobias is an entertaining storyteller. I'm also a big fan of Burton Malkiel's The Random Walk Guide to Investing: Ten Rules for Financial Success. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/getting_started.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/getting_started.html savings Wed, 18 Jun 2008 11:51:23 -0800 Question: I am 37 and getting married in three months to a gal who is 10 years younger than me. Financially, we're at different places in our lives and I am wondering what I need to do as we merge our lives together to protect my modest wealth and assets in case of a financial disaster on her part. I've had my hard financial knocks in life, but have gotten to the point where I have a good job, good credit, own a condo, own a car, have money in retirement accounts, and my credit card debts are very low and manageable (and could be paid off quickly if needed). My fiancée has huge student loan obligations ($100k+) and damaged credit because she declared bankruptcy three years ago. Her debt is almost entirely student loan debt, so that does simplify things. How would you proceed into such a situation? Please do not use my name if you answer this question as I do not want friends/family to be able to identify us should they hear or see the question. Thank you! Washington D.C. Answer: Ah, romance. Poets, philosophers, and songwriters have long struggled to capture the mysteries of love and marriage. That key question is this: Are all the financial issues out on the table, discussed, and the approach toward dealing with debts bought into by both of you? Are you on the same page about handling her student loan debt? Your credit cards? How much is each of you going to set aside in retirement accounts? What you need to do is really gain an intimate understanding of each others desires and fears about managing money as you go into this marriage. The rest is financial technicalities. This is where a prenuptial agreement can help. Now, most people don't like the idea of a prenup. It isn't romantic. It has an aura of preparing for failure in the marriage. But look at it this way: A prenup can be a critical part of your money discussion. The beauty of a prenuptial agreement is that it is a vehicle, an impetus for full financial disclosure. Many couples like to write their own wedding vows. A prenup allows a couple to write their own marriage contract. It should cover all assets, including property and difficult-to-value holdings like stock options, businesses and professional practices, and academic degrees. You should also cover all debts, potential inheritances, and spousal support. A prenup is a binding legal contract. That means you'll need lawyers to help both of you understand the document and to make sure the prenup does not violate any laws. Another way to handle it is a more informal, do-it-yourself approach. It isn't a legal document and it won't hold up in court, but it's a written understanding between the two of you. It's a way of getting both of you on the same financial page. The value lies not in the contract, but in the process. Two books that might help your financial relationship: For Richer, Not Poorer: The Money Book For Couples by Ruth Hayden (Health Communications), and Prenups for Lovers by Arlene Dubin (Villard Books). ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/merging_finances_including_deb.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/merging_finances_including_deb.html Budgeting Debt Tue, 17 Jun 2008 09:35:46 -0800 Question: My daddy taught me that rent is a waste of money, and my family has been renting for a year after relocating from NC. I'm ready to buy a house by September 1st at the latest. I think I'll be happy with the balance between falling prices and favorable interest rates (before they head up even more) by September. My husband thinks we should wait another year and continue to rent. Our price range is low in this market, between 450,000 and 550,000 and we've seen some homes in which we'd be comfortable with our two boys, 2 and 4 years old. Also, I want to move close to the school I've chosen for my oldest for kindergarten. I'd hate to move to another apartment. Is it too soon to buy? Will I regret jumping into the market in September, possibly before the prices hit rock bottom? One more thing--we can put down between 10 and 20%. Does it matter if we put down 10%? Thanks for any input you can provide. Jeri, North Hollywood, CA Answer: Here's the safe forecast: You know once you buy a house prices will come down some more. Hitting bottom is a matter of luck. I also don't think you should feel any financial pressure to move. My own guess is that that the downward pressure on home prices isn't over, and there won't be any financial penalty for any potential homeowner that waits. (But that's a guess, of course.) Lifestyle reasons may push you toward moving sooner. For instance, you already know what neighborhood you want to live in, and the kind of house you'd like to own. So, I would work with a real estate agent to really dig into the neighborhood. I would talk with a banker to see what kind of loan and rate you will get in this environment. I would be choosy and tough in any negotiation. In other words, be willing to walk away. But even if you miss bottom--which is highly likely--that may be okay for lifestyle reasons and assuming this is a long term investment. Put somewhat differently, both you and your husband are right, so use that knowledge in your favor when looking to buy a home. The 20% vs. the 10% is really a number crunching exercise. You'll get the best rate on a 30-year fixed-rate mortgage with 20% down in the current environment. And, if you can do it, 20% is usually preferable. The reason to put in less than 20% is not to tie up all your savings in one asset. I'd run the numbers, look at the trade-offs, and then decide what works best for your family finances. You will pay PMI or private mortgage insurance with less than a 20% downpayment. ]]> http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/buy_a_homeor_wait.html http://www.publicradio.org/columns/marketplace/gettingpersonal/2008/06/buy_a_homeor_wait.html Housing Mon, 16 Jun 2008 09:50:19 -0800