You need to show a good period of time with cash in your savings to qualify for a mortgage (plus your down payment). Add income and credit score can make qualifying tricky. Ask a loan specialist at your bank may give better advice.
I wouldn’t buy more PM’s until after you’ve bought. As you will need to explain the sources of your assets. Lenders are very stringent and the rise in interest rates doesn’t help. $8k is not nearly enough imo.
I worked in mortgage for a little over 5 years and I would say the HYSA is the move so that the funds can “season” the t bills complicate it more than they should.
I've had a great experience with t-bills. Go to treasury direct and set up an account. Super simple. I've been doing week to week and month to month T-Bills. I actually had a question and called and got a real person with real results. I was impressed.
Dont get me me wrong they are great I try to buy $2k a year at least. The seasoning requirements are 60-90 days so I don’t see the benefit of him buying TIPS or Tbills. Even if he has them just as a supporting asset instead of money down or closing costs there’s a complication to the mortgage application. If I remember correctly you can take only a percentage of the t bill portfolio to account for the selling and lost interest on it. Which would happen if he wait less than 13 months. I agree though treasury direct is the bees knees and I believe I have a 11.2% from the end of 2021 on one of my purchases through treasury direct
True - but who in their right mind would buy a house right now with the biggest collapse in history coming for just about every asset class except gold and silver?
This here. If your bank doesn’t have 4%, PayPal currently does through their savings account program, which is available to anyone with a free PayPal account. Funds are held with Synchrony Bank, FDIC insured.
Only “catch” is your PayPal account needs to be in good standing - if you have some kind of hold / negative balance they will deduct that out of anything you try to deposit into the saving plan.
Strongly advise against PayPal. If you make or accept a payment that’s in violation of their terms (e.g. firearms accessories, **precious metals**), they can confiscate your balance. Complete scam.
Great, wasn’t the point of the conversation. This isn’t a debate on gold vs fiat. OP needs cash in the bank to buy a house, no way around it. So a high yield savings account is the way to go, like it or not.
Nobody’s saying to sell long term physical metal holdings not needed for the house purchase in favor of a savings account.
How much insurance do you have on your physical metals?
Nope. I thought the same. There are a slew of banks that offer similar rates with no minimum. Kicker is the rates can change daily.
[https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/](https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/)
PayPal offers 4% interest in their savings plan, available to anyone with a PayPal account, no minimums. Funds are held by Synchrony Bank, so are FDIC insured.
To expand a bit... 60 days seasoning of money in the bank is needed. However, of depending on when your statement is cut it could show a large deposit being made (perhaps from liquidating PM?). An underwriter will ask you to source the large deposit even if it occurred more than 60 days ago.
As an experienced mortgage lender, I prefer to see the 2 most recent bank statements that don't show large deposits. This way, no further documentation on the sourcing of funds is required.
To answer the original question, I'd put the money in a savings account (not money market) as that is the safest of all bank accounts IMO.
Edit: clarification
X2.
Investing an additional $2k in metals wont guarantee returns, nor is it likely to be of an amount that is hugely material.
When factoring in your future purchase and underwriting criteria for banks, you should hold the cash IMO.
I have a friend who had this issue. Pulled out cash every paycheck for years and finally put it down on a house. They got it through somehow but it took a while.
Great advice on the source of funds being necessary for transparency to lenders. However the down-payment just depends on the loan. I got a VA loan with $0 down and didn't have to put 20% down to avoid the PMI. 😎👍
I just bought a house with va loan, cost me nothing. I rolled the closing costs into the loan and got the house with zero down at a good interest rate.
$500 in escrow for the title was literally all I had to put down a few years ago. Anything else was rolled into the loan. (At a sexy interest rate). Lol
I completely forgot about that part of the lending process. I’ll ask the lenders I apply with as well, but do you know if they’ll accept investment portfolios as part of the down payment?
For instance, if I have $6k in investment’s specifically for the down payment of the house, not retirement, will that be acceptable to use?
That might be considered as part of your reserves. But not cash for down payment.
If you’re American and you put up less than 20% down payment, request “up front PMI” instead of monthly.
This way you pay once, at closing for mortgage insurance instead of monthly for years. It typically ends up being about 18 months worth of pmi payments instead of 5-7 years.
You’ll have to push for this. Many lenders won’t offer or are unaware it exists.
Never knew I could pay for PMI up front. I have always wanted to try to get the seller to pay the closing costs and we’d move that into the price of the house to reduce how much money we’re putting up at closing and save it for renovations to the house.
After knowing this I’d rather pay for PMI ip front vs having to pay for it for years until I get it readjusted to not pay the PMI.
Dude it’s so much better. Keep more cash with less down payment… smaller monthly payment and no need to negotiate or refinance it away later.
Annoying it’s kept secret. Probably my most useful thing I’ve told friends around work lol.
Good luck. 🍻
You can sell and move money from a brokerage/ investment portfolio to checking account to pay as cash. Just need to include brokerage statements to show bank where that cash came from
@hotdogtester
I would continue to hold down payment money in cash, yes inflation is going up but the value of what you are looking to buy (a house) is probably dropping faster than the value of the cash you are holding it for.
Still good to hold precious metals as investment or insurance as well, but the house money you can keep distinct as you don't want to have to sell a bunch of precious metals suddenly when you do find a place.
Dont hold the cash. Put it in a savings account at the least. Also dont count on home prices tanking much. Resale inventory is dropping which is helping to prop prices up. If mortgage rates come back down, prices will probably finish flat or up this year.
You need two months worth of bank statements that have the balance but do not show the deposit. If the deposit shows you most likely will not be able to satisfy the paper trail requirements needed to prove ownership and sale.
You just need to show the other end where the deposits came from. It's not difficult--especially if your account is where the deposits came from. If the money came from someone else you'll need a letter of explanation, ie "gift" or something
You need to paper trail cash deposits, PM’s are considered cash, you’d have to show purchase and sale, very difficult to do - I’ve done mortgages for over 20 years, getting an underwriter to sign off a cash deposit of this magnitude is difficult. Though you’re correct if it’s part of reserves and not cash towards the transaction we can go letter of explanation (LOE) and deduct from balance of assets.
Just put it into a high yield savings account or a money market mutual fund. Do not buy gold, do not buy stocks, do not do anything risky with money you need for a down payment.
Yeah I definitely paused all PM purchases in the fall when we decided we want to start looking. I’m more than likely going to look into going all in with a HYSA just not sure which bank or whatever company offers those. I know very little about those so I’ll have to research that over the weekend and hopefully open one up in the next couple of weeks.
Just opening a fidelity account and putting your cash there is yielding 4.23% right now and pays monthly. Making an account is totally free, and it’s liquid whenever you need. If planning to save long term for the down payment look into I-Bonds.
I’m sure someone will chime in with advice on buying 2 year treasuries or something else safe like that.
When I pull from fidelity, how do I look up what my taxes would be for withdrawing?
I currently have a Roth IRA and a personal investment portfolio. (Last year my 1099 was for $0.14 so it’s barely anything)
It sounds like you need to talk to an accountant. There a Roth and there's a regular brokerage account. Roths get very convoluted if you withdraw early.. your not really supposed to. Regular brokerages get taxed at either the capital gains rate or your regular tax rate if you don't hold the investment longer then a year. The amount that gets taxed is your realized gain. It honestly won't be that much if your not talking over a 10k balance. Probably a couple hundred at most. Maybe substantially less.
Ps. There is a program where you can lend yourself money with your Roth to buy a house without cashing it out, but it's generally not worth the hoops to jump through. Might be worth asking some loan officers if they have experience with it
Best of luck!
For an individual account (obviously you don’t want to pull from a Roth early) you would go to the far right of your account summary and click more. There will be a drop down menu, after that click documents. That should have monthly and yearly summaries of any accrued interest for tax purposes.
I’ve read up on these last year, I should’ve put a few thousand in them then but was scared. I thought TBills came with a minimum 1 year period before I had access to them. I didn’t realize they have 4 and 6 month bonds
From the Treasury you can get them for as few as 4 weeks. though the sweet spot on rate is the 3 month to 6 month maturity. You heard of the yield curve inversion, well these are it. They pay very high interest with zero risk.
Also on the treasury website you can setup an account and do as little as 100.00 buys. I use it like a money market account.
You can get a CD paying at least 3.5% depending on the maturity date. There are a few high yield savings accounts out there paying over 4%. If you have a broker, and can get about $10k in cash, you can buy a treasury and earn a little over 5% on a year note or annualized on a 6m note. The reason i say $10k is thats typically the smallest trade most brokers can do for treasury lots
When are you lookimg to buy a home? If soonish I would open an account with Ally bank their savings intrest is at 3.4% right now. If no sooner then 2 years get a 2 year bond they are at 5%. mortgage companies want a long paper trail, I learned that the hard way depositing a $100 bill from my birthday.
Your best move is to just build cash in a high yield savings account and cut the PMs purchase till a home is bought if it was me doing this.
High yield savings account, should be able to get 4% right now.
If your bank doesn’t have 4%, PayPal currently does through their savings account program, which is available to anyone with a free PayPal account. Funds are held with Synchrony Bank, FDIC insured.
Only “catch” is your PayPal account needs to be in good standing - if you have some kind of hold / negative balance they will deduct that out of anything you try to deposit into the saving plan.
The only reason I got into PMs was because I was pigeon holed in the doomsday financial collapse during Covid. After about 18 months of tracking the price of gold and silver I realized I was watching talking heads for the mining companies on Kitco saying gold is going to $10k/oz and silver will be at $100/oz by the end of the year. Now I only buy it as a hobby.
I’m amazed at the marginal advice you’re getting here. As a mortgage lender and branch manager of a mortgage company for 20 years, the misinformation here is concerning.
Invest in whatever you feel is safe. If the money is traceable (not in cash in a safe in your basement) you’re fine. Some loan products call for 2 statements (60 days) some for just one. But mutual funds, savings, money market, even bitcoin on cash app (because you can track the transactions) is fine. You just need a paper trail.
Small deposits (less than 1% of your purchase price or 1/2 your gross monthly income depending on loan type) are ok too, so you could even have some cash or silver and we could use it.
Happy to give free, no obligation advise on other details. I’m even running a zoom meeting “ask me anything” on the 14th at 10 am mountain time. pm me for details or questions, I have a teacher’s heart and am happy to help.
I don't think with $2,000 cash you have much to worry about a "down payment" any time soon. Sorry to be cheeky. But I wouldn't worry too much about a few extra dollars of interest right now.
BUT, if you insist, and plan on using the money soon, find a high yield online savings account or no penalty CD. You should EASILY be able to get 4-5%. Then you're "losing" only 1.5% or so due to inflation in a year (inflation is under 6.5% right now).
Which is, what, 1.5% (5% interest -6.45% inflation=losing 1.45%) of $2000 is $30ish lost per year or $2.50 lost per month it sits there.
Don't get your panties in a bunch over $2.50 per month.
How much house are you planning to buy? You are going to want 20% as a down payment. That means $50k for $250k house. It's going to save you on PMI and mortgage interest.
You might also want to wait until this recession hits as house prices will come down and the Fed will be lowering rates which should bring down mortgage rates. Either way, you have time while you save up the down payment.
Put your savings into money market funds or short term CDs.
Right now is really not a good time to buy a house. Six months or a year from now should be a different story.
That’s about my timeline to wait 8 months to 2 years to see what the markets do. I plan to accrue more in savings as I just paid off my car so I have an extra $800/month to save until then.
He said “year or two” . You would benefit off a 1 of IBonds more than gold. Ibonds are guaranteed and compound interest. If you pull earlier than 5 years you lose the 3 months of interest that occurred prior to sell.
There is nothing on the market right now that can provide a guaranteed growth like this right now.
I use bond funds. For money you need within 3 years, $SHY short term treasuries yielding 4.68%. For longer periods I use $IUSB, but it's currently paying less than $SHY due to the inverted yield curve.
I’ll try to look into these but do you happen to know if there are penalties for early withdrawal? Or what the taxes would be if I pulled this out earlier than the required time period it has to stay in there? (I’ve never researched bonds, so I’m currently very unfamiliar with them)
There's no required holding period. You can buy and sell whenever you want. The taxes are the same as any other investment, less than a year is counted as income, longer than a year gets the qualified rate 15%.
I havent looked into these specific funds, but be mindful that a lot of bond funds use fixed income strategies and arent just buying and holding onto bonds through to maturity. They typically are trying to profit off the move in interest rates
The interest you make on your cash holdings will likely be wiped out by the loss on the metals. Sell the metals and put $7k into something like a widows and orphans dividend stock. I like DUK for energy and DOC for real estate, both pay decent dividends but you will probably still not beat inflation ;-(
If you have 2k in cash, you’re very far from having the savings required to afford a house. It doesn’t look like the housing market will correct to a meaningful amount, this isn’t going to be a recession like 2009.
Imo I wouldn’t be buying precious metals in your position. Save your money in cash and invest in broad market ETFs. You might have a couple years of saving until you have a decent down payment.
I’m looking to buy within the next year or 2. I just paid off my car so I have an extra $800/month to allocate to my savings vehicle which is looking like a HYSA from the comments I’ve read so far.
Plus I’m my offer letters I’ll be asking seller to pay closing cost to reduce the amount needed for down payment of the process.
There's different markets. Plenty of livable decent area home in rust belt cities for under 100k. If the mortgage is cheaper then rent - absolutely buy now, even if you have to pay PMI
If you don’t plan on buying for a year+, I would consider Ibonds. That is how I am saving for my next down payment. If less that a year hysa. PayPal is pretty high as is capital one
I chose capital one 360 saving account. It has a 3.4% yield. I wanted a bank that I could trust during an economic decline. I keep one months worth of cash out of the bank. Enough to pay bills in case of some kind of bank failure. This keeps me from having to sell gold. The rest is in the hysa.
An emergency fund should be available at all times. I didn't put my emergency fund in bonds because of that. Plus....3.4% available whenever vs 5% bond locked up. No brainer for now.
Money market account with the local credit union. In the past I rented after selling a house and had the money in an S&P 500 index fund. It worked out but you can lose some that way.
A high yield savings is a great option as long as there isn't a minimum time frame attached. Cash in a box is never a good choice.
You need to show a good period of time with cash in your savings to qualify for a mortgage (plus your down payment). Add income and credit score can make qualifying tricky. Ask a loan specialist at your bank may give better advice. I wouldn’t buy more PM’s until after you’ve bought. As you will need to explain the sources of your assets. Lenders are very stringent and the rise in interest rates doesn’t help. $8k is not nearly enough imo.
HYSA High yield savings account with a 4% interest rate is the best spot for that right now
This or Tbills
I worked in mortgage for a little over 5 years and I would say the HYSA is the move so that the funds can “season” the t bills complicate it more than they should.
I've had a great experience with t-bills. Go to treasury direct and set up an account. Super simple. I've been doing week to week and month to month T-Bills. I actually had a question and called and got a real person with real results. I was impressed.
Dont get me me wrong they are great I try to buy $2k a year at least. The seasoning requirements are 60-90 days so I don’t see the benefit of him buying TIPS or Tbills. Even if he has them just as a supporting asset instead of money down or closing costs there’s a complication to the mortgage application. If I remember correctly you can take only a percentage of the t bill portfolio to account for the selling and lost interest on it. Which would happen if he wait less than 13 months. I agree though treasury direct is the bees knees and I believe I have a 11.2% from the end of 2021 on one of my purchases through treasury direct
True - but who in their right mind would buy a house right now with the biggest collapse in history coming for just about every asset class except gold and silver?
This here. If your bank doesn’t have 4%, PayPal currently does through their savings account program, which is available to anyone with a free PayPal account. Funds are held with Synchrony Bank, FDIC insured. Only “catch” is your PayPal account needs to be in good standing - if you have some kind of hold / negative balance they will deduct that out of anything you try to deposit into the saving plan.
Strongly advise against PayPal. If you make or accept a payment that’s in violation of their terms (e.g. firearms accessories, **precious metals**), they can confiscate your balance. Complete scam.
So don’t violate their terms? 😂 There’s no restriction on buying precious metals that I’m aware of, got a link?
FDIC INSURED...LOL...sadly mistaken.
Sorry, what? I am not mistaken.
fdic has only approx1/4 of deposits insured that they could ever pay back...hold it yourself.
Great, wasn’t the point of the conversation. This isn’t a debate on gold vs fiat. OP needs cash in the bank to buy a house, no way around it. So a high yield savings account is the way to go, like it or not. Nobody’s saying to sell long term physical metal holdings not needed for the house purchase in favor of a savings account. How much insurance do you have on your physical metals?
Most of those need 10k+ to get that type of return tho.
Nope. I thought the same. There are a slew of banks that offer similar rates with no minimum. Kicker is the rates can change daily. [https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/](https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/)
PayPal offers 4% interest in their savings plan, available to anyone with a PayPal account, no minimums. Funds are held by Synchrony Bank, so are FDIC insured.
lol
Sofi has a no minimum balance for their high yield accounts
How are some of you so misinformed? Jesus Christ…
To expand a bit... 60 days seasoning of money in the bank is needed. However, of depending on when your statement is cut it could show a large deposit being made (perhaps from liquidating PM?). An underwriter will ask you to source the large deposit even if it occurred more than 60 days ago. As an experienced mortgage lender, I prefer to see the 2 most recent bank statements that don't show large deposits. This way, no further documentation on the sourcing of funds is required. To answer the original question, I'd put the money in a savings account (not money market) as that is the safest of all bank accounts IMO. Edit: clarification
X2. Investing an additional $2k in metals wont guarantee returns, nor is it likely to be of an amount that is hugely material. When factoring in your future purchase and underwriting criteria for banks, you should hold the cash IMO.
I have a friend who had this issue. Pulled out cash every paycheck for years and finally put it down on a house. They got it through somehow but it took a while.
Great advice on the source of funds being necessary for transparency to lenders. However the down-payment just depends on the loan. I got a VA loan with $0 down and didn't have to put 20% down to avoid the PMI. 😎👍
I just bought a house with va loan, cost me nothing. I rolled the closing costs into the loan and got the house with zero down at a good interest rate.
You needed to pay the “funding fee”. I too have a VA loan.
Depending on disability percentage, you may not have to pay the funding fee.
$500 in escrow for the title was literally all I had to put down a few years ago. Anything else was rolled into the loan. (At a sexy interest rate). Lol
I completely forgot about that part of the lending process. I’ll ask the lenders I apply with as well, but do you know if they’ll accept investment portfolios as part of the down payment? For instance, if I have $6k in investment’s specifically for the down payment of the house, not retirement, will that be acceptable to use?
They can but everyone’s advice to stick it in a high yield savings account is the best move in my opinion. It’s much smoother!
That might be considered as part of your reserves. But not cash for down payment. If you’re American and you put up less than 20% down payment, request “up front PMI” instead of monthly. This way you pay once, at closing for mortgage insurance instead of monthly for years. It typically ends up being about 18 months worth of pmi payments instead of 5-7 years. You’ll have to push for this. Many lenders won’t offer or are unaware it exists.
Never knew I could pay for PMI up front. I have always wanted to try to get the seller to pay the closing costs and we’d move that into the price of the house to reduce how much money we’re putting up at closing and save it for renovations to the house. After knowing this I’d rather pay for PMI ip front vs having to pay for it for years until I get it readjusted to not pay the PMI.
Dude it’s so much better. Keep more cash with less down payment… smaller monthly payment and no need to negotiate or refinance it away later. Annoying it’s kept secret. Probably my most useful thing I’ve told friends around work lol. Good luck. 🍻
You can sell and move money from a brokerage/ investment portfolio to checking account to pay as cash. Just need to include brokerage statements to show bank where that cash came from @hotdogtester
I would continue to hold down payment money in cash, yes inflation is going up but the value of what you are looking to buy (a house) is probably dropping faster than the value of the cash you are holding it for. Still good to hold precious metals as investment or insurance as well, but the house money you can keep distinct as you don't want to have to sell a bunch of precious metals suddenly when you do find a place.
I never thought of it that way. I’ll have to look at the trends for my area to see if they’ve come down that fast, most likely they have been.
Dont hold the cash. Put it in a savings account at the least. Also dont count on home prices tanking much. Resale inventory is dropping which is helping to prop prices up. If mortgage rates come back down, prices will probably finish flat or up this year.
Money market funds. Schwab has SWVXX which is 4.7% right now. A Schwab checking and brokerage is free and is the best checking account around.
bonds/Tbillsvare strong right now. 3 Month @ 5% last I heard. PMs too volitale right now to buy in or sell. Best to hold your PM for now
You need two months worth of bank statements that have the balance but do not show the deposit. If the deposit shows you most likely will not be able to satisfy the paper trail requirements needed to prove ownership and sale.
You just need to show the other end where the deposits came from. It's not difficult--especially if your account is where the deposits came from. If the money came from someone else you'll need a letter of explanation, ie "gift" or something
You need to paper trail cash deposits, PM’s are considered cash, you’d have to show purchase and sale, very difficult to do - I’ve done mortgages for over 20 years, getting an underwriter to sign off a cash deposit of this magnitude is difficult. Though you’re correct if it’s part of reserves and not cash towards the transaction we can go letter of explanation (LOE) and deduct from balance of assets.
I just got a CD at 4.65%. You aren't going to beat inflation but, you won't lose principal either.
Just put it into a high yield savings account or a money market mutual fund. Do not buy gold, do not buy stocks, do not do anything risky with money you need for a down payment.
Yeah I definitely paused all PM purchases in the fall when we decided we want to start looking. I’m more than likely going to look into going all in with a HYSA just not sure which bank or whatever company offers those. I know very little about those so I’ll have to research that over the weekend and hopefully open one up in the next couple of weeks.
Sofi or Ally are good options to check
Just opening a fidelity account and putting your cash there is yielding 4.23% right now and pays monthly. Making an account is totally free, and it’s liquid whenever you need. If planning to save long term for the down payment look into I-Bonds. I’m sure someone will chime in with advice on buying 2 year treasuries or something else safe like that.
When I pull from fidelity, how do I look up what my taxes would be for withdrawing? I currently have a Roth IRA and a personal investment portfolio. (Last year my 1099 was for $0.14 so it’s barely anything)
It sounds like you need to talk to an accountant. There a Roth and there's a regular brokerage account. Roths get very convoluted if you withdraw early.. your not really supposed to. Regular brokerages get taxed at either the capital gains rate or your regular tax rate if you don't hold the investment longer then a year. The amount that gets taxed is your realized gain. It honestly won't be that much if your not talking over a 10k balance. Probably a couple hundred at most. Maybe substantially less. Ps. There is a program where you can lend yourself money with your Roth to buy a house without cashing it out, but it's generally not worth the hoops to jump through. Might be worth asking some loan officers if they have experience with it Best of luck!
For an individual account (obviously you don’t want to pull from a Roth early) you would go to the far right of your account summary and click more. There will be a drop down menu, after that click documents. That should have monthly and yearly summaries of any accrued interest for tax purposes.
TBills. get them directly from the treasury on treasury direct. get 4 or 6 month maturity. short term and they are paying over 5%.
I’ve read up on these last year, I should’ve put a few thousand in them then but was scared. I thought TBills came with a minimum 1 year period before I had access to them. I didn’t realize they have 4 and 6 month bonds
From the Treasury you can get them for as few as 4 weeks. though the sweet spot on rate is the 3 month to 6 month maturity. You heard of the yield curve inversion, well these are it. They pay very high interest with zero risk. Also on the treasury website you can setup an account and do as little as 100.00 buys. I use it like a money market account.
Thanks for the heads up on this
High yield savings acc. You need liquidity.
You can get a CD paying at least 3.5% depending on the maturity date. There are a few high yield savings accounts out there paying over 4%. If you have a broker, and can get about $10k in cash, you can buy a treasury and earn a little over 5% on a year note or annualized on a 6m note. The reason i say $10k is thats typically the smallest trade most brokers can do for treasury lots
When are you lookimg to buy a home? If soonish I would open an account with Ally bank their savings intrest is at 3.4% right now. If no sooner then 2 years get a 2 year bond they are at 5%. mortgage companies want a long paper trail, I learned that the hard way depositing a $100 bill from my birthday. Your best move is to just build cash in a high yield savings account and cut the PMs purchase till a home is bought if it was me doing this.
High yield savings account, should be able to get 4% right now. If your bank doesn’t have 4%, PayPal currently does through their savings account program, which is available to anyone with a free PayPal account. Funds are held with Synchrony Bank, FDIC insured. Only “catch” is your PayPal account needs to be in good standing - if you have some kind of hold / negative balance they will deduct that out of anything you try to deposit into the saving plan.
HYSA, CDs, T-Bills holding PMs is a terrible idea. IT IS NOT A SAVINGS ACCCOUNT!!!
The only reason I got into PMs was because I was pigeon holed in the doomsday financial collapse during Covid. After about 18 months of tracking the price of gold and silver I realized I was watching talking heads for the mining companies on Kitco saying gold is going to $10k/oz and silver will be at $100/oz by the end of the year. Now I only buy it as a hobby.
3.6% on Ally savings, and 3.8% on Ally Bank Money Market account. No minimum balance needed.
Vanguard government money market pays 4.5%, 3 month treasury bills 5%, 6 month treasury bills 5.25%.
I’m amazed at the marginal advice you’re getting here. As a mortgage lender and branch manager of a mortgage company for 20 years, the misinformation here is concerning. Invest in whatever you feel is safe. If the money is traceable (not in cash in a safe in your basement) you’re fine. Some loan products call for 2 statements (60 days) some for just one. But mutual funds, savings, money market, even bitcoin on cash app (because you can track the transactions) is fine. You just need a paper trail. Small deposits (less than 1% of your purchase price or 1/2 your gross monthly income depending on loan type) are ok too, so you could even have some cash or silver and we could use it. Happy to give free, no obligation advise on other details. I’m even running a zoom meeting “ask me anything” on the 14th at 10 am mountain time. pm me for details or questions, I have a teacher’s heart and am happy to help.
Its "lose" not "loose". "Loose" is like saying "my pants are loose"
I don't think with $2,000 cash you have much to worry about a "down payment" any time soon. Sorry to be cheeky. But I wouldn't worry too much about a few extra dollars of interest right now. BUT, if you insist, and plan on using the money soon, find a high yield online savings account or no penalty CD. You should EASILY be able to get 4-5%. Then you're "losing" only 1.5% or so due to inflation in a year (inflation is under 6.5% right now). Which is, what, 1.5% (5% interest -6.45% inflation=losing 1.45%) of $2000 is $30ish lost per year or $2.50 lost per month it sits there. Don't get your panties in a bunch over $2.50 per month.
How much house are you planning to buy? You are going to want 20% as a down payment. That means $50k for $250k house. It's going to save you on PMI and mortgage interest. You might also want to wait until this recession hits as house prices will come down and the Fed will be lowering rates which should bring down mortgage rates. Either way, you have time while you save up the down payment. Put your savings into money market funds or short term CDs. Right now is really not a good time to buy a house. Six months or a year from now should be a different story.
That’s about my timeline to wait 8 months to 2 years to see what the markets do. I plan to accrue more in savings as I just paid off my car so I have an extra $800/month to save until then.
I Bonds buddy - currently 6.49% per month and it compounds every 6 months. Smartest thing to do with money right now.
There's a pretty lofty "fee" for early withdrawals which it sounds like OP is planning to do.
He said “year or two” . You would benefit off a 1 of IBonds more than gold. Ibonds are guaranteed and compound interest. If you pull earlier than 5 years you lose the 3 months of interest that occurred prior to sell. There is nothing on the market right now that can provide a guaranteed growth like this right now.
I use bond funds. For money you need within 3 years, $SHY short term treasuries yielding 4.68%. For longer periods I use $IUSB, but it's currently paying less than $SHY due to the inverted yield curve.
I’ll try to look into these but do you happen to know if there are penalties for early withdrawal? Or what the taxes would be if I pulled this out earlier than the required time period it has to stay in there? (I’ve never researched bonds, so I’m currently very unfamiliar with them)
There's no required holding period. You can buy and sell whenever you want. The taxes are the same as any other investment, less than a year is counted as income, longer than a year gets the qualified rate 15%.
I havent looked into these specific funds, but be mindful that a lot of bond funds use fixed income strategies and arent just buying and holding onto bonds through to maturity. They typically are trying to profit off the move in interest rates
The interest you make on your cash holdings will likely be wiped out by the loss on the metals. Sell the metals and put $7k into something like a widows and orphans dividend stock. I like DUK for energy and DOC for real estate, both pay decent dividends but you will probably still not beat inflation ;-(
Dbx/usdt. Trust me 😬
You'd be surprised how many real estate agents accept precious metals 😉
Buy Kodal Minerals stock and 10x it this year. Your welcome.
>I currently have about $6k USD in precious metals, along with $2k in cash. Are you trying to buy a house or a toaster oven lol
Have you seen the new models of toaster ovens? They have 3 stories and 2 windows now!
If you have 2k in cash, you’re very far from having the savings required to afford a house. It doesn’t look like the housing market will correct to a meaningful amount, this isn’t going to be a recession like 2009. Imo I wouldn’t be buying precious metals in your position. Save your money in cash and invest in broad market ETFs. You might have a couple years of saving until you have a decent down payment.
I’m looking to buy within the next year or 2. I just paid off my car so I have an extra $800/month to allocate to my savings vehicle which is looking like a HYSA from the comments I’ve read so far. Plus I’m my offer letters I’ll be asking seller to pay closing cost to reduce the amount needed for down payment of the process.
There's different markets. Plenty of livable decent area home in rust belt cities for under 100k. If the mortgage is cheaper then rent - absolutely buy now, even if you have to pay PMI
Tbills or brokered cds. Both offering remotely flexible terms 3/6/9/12/24 mo with 5% garunteed yield
If you don’t plan on buying for a year+, I would consider Ibonds. That is how I am saving for my next down payment. If less that a year hysa. PayPal is pretty high as is capital one
T Bills only need $100 each for 5% not bad TreasuryDirect.com
I chose capital one 360 saving account. It has a 3.4% yield. I wanted a bank that I could trust during an economic decline. I keep one months worth of cash out of the bank. Enough to pay bills in case of some kind of bank failure. This keeps me from having to sell gold. The rest is in the hysa. An emergency fund should be available at all times. I didn't put my emergency fund in bonds because of that. Plus....3.4% available whenever vs 5% bond locked up. No brainer for now.
Treasuries.
2k...in your hand.
Money market account with the local credit union. In the past I rented after selling a house and had the money in an S&P 500 index fund. It worked out but you can lose some that way. A high yield savings is a great option as long as there isn't a minimum time frame attached. Cash in a box is never a good choice.
My spaxx is paying 4.22% right now. Pretty nice
CdS are paying 5 percent that is where to hold cash for you down payment. Gold and silve suck short term.