Yeah, finding that sweet spot is tricky. Personally, I prefer keeping a decent cash buffer even if it means paying slightly more interest. Had a similar experience—roof damage after a storm, insurance took forever to sort it out, and I was glad I didn't tie up every penny in equity. I guess it boils down to your risk tolerance and the property's condition... older properties probably warrant a bigger emergency fund.
"older properties probably warrant a bigger emergency fund."
Couldn't agree more. Had a client once who stretched every dollar into the down payment on an older duplex, thinking they'd save big on interest. Two months in, the furnace decided to retire without notice—in the middle of winter, naturally. They ended up scrambling for funds and paying through the nose for emergency repairs. Lesson learned: sometimes paying a bit more interest is worth it for peace of mind and flexibility... especially with older properties.
Definitely agree with this. Older properties can throw curveballs at you—roof leaks, plumbing issues, electrical surprises... you name it. Having extra liquidity often beats shaving a fraction off your interest rate, especially when unexpected repairs pop up.
I get the logic behind keeping extra cash handy, especially with older properties. But honestly, when I bought my first place—a charming but ancient duplex—I went the opposite route. I put down a bigger chunk upfront to lower the monthly payments. My thinking was, if something major did pop up, at least I wouldn't be scrambling every month to cover a hefty mortgage on top of repairs.
And yeah, things did pop up (hello, surprise plumbing disaster in month three...). But because my monthly payments were manageable, I could budget repairs into my regular expenses without feeling stretched thin. Liquidity is great, sure, but sometimes having predictable, lower monthly costs can give you peace of mind too. Just another angle to consider, especially if you're the type who stresses about monthly bills piling up.
I totally get your reasoning on the bigger down payment—definitely makes sense to lower stress with smaller monthly bills. But just to throw another angle out there, have you considered how interest rates play into your credit profile over the long term?
Here's a quick breakdown of why I tend to lean toward keeping cash handy and accepting a slightly higher interest rate (at least temporarily):
1. Credit Utilization: Keeping extra cash liquid can help you avoid putting unexpected repairs on credit cards, which can spike your utilization ratio and ding your credit score.
2. Emergency Fund: With older properties, like your charming duplex (and its surprise plumbing adventures 😅), having immediate funds ready can prevent panic borrowing or tapping high-interest credit lines.
3. Refinancing Options: If you keep liquidity now, you can always refinance later when your property's value goes up or your credit improves—potentially snagging even better rates down the road.
Not saying one way is always better... just worth factoring in how each impacts your credit health and flexibility down the line.
