[TStoneMBD]

im going to do my best to answer these questions as i have some understanding of finance but am not sure what the current market rates are.

if you can find an investment with over 5% returns and no risk, or returns greater than 5% worth the risk, then certainly use your loan money to invest.

an important thing to consider however is whether or not you will qualify for a mortgage on a home. i recommend that you look into your price range and find out whether the banks will want collateral, what LTV ratio they will offer you along with interest rate and points.

if you cant get a mortgage for 5% interest then clearly its a good idea to simply put cash down on your place to save on the interest rates.

when buying your home, you are essentially either going to have alot of equity in your home, or you are going to have little equity but alot of investments. if you apply ev principles, either way you are going to be investing money with 5% interest rates. if you cannot find an investment worth paying 5% interest on, then it all comes down to mortgage rates/loan rates.

i recommend that you reconsider purchasing a home for the time being. the real estate bubble is a serious concern and many people fear that homeowners are going to go into considerable debt when the rupture occurs. even real estate book-writers like robert kiyosaki admit to the real concerns of the bubble and has said that the profitability of the real estate market is currently over.

before purchasing your home, you should strongly consider reading some books on the real estate bubble. when and if it happens, real estate prices will decline significantly and you can jump on your own home with very little interest rates. the real estate bubble will be a period in which rich people profit off the losses of the poor. you want to make sure that you are in prime situation to take advantage of epidemic.