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Ask Dave

Down Payment

Daniel doesn't know if he should stop his retirement contributions to save for a house.

QUESTION: Daniel makes $40,000 a year and they have $8,000 in the bank. They want to move into a house and wonder if they should hold off their retirement contributions to save for a house.

ANSWER: That’s a brilliant idea as long as you do it quickly, like in a couple of years. Don’t have it take 10 years. I would even stop retirement to save up a down payment. When you buy the house, only get a 15-year fixed rate loan where the payments are no more than a fourth of your take-home pay.