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Old 07-19-2008, 06:46 AM
 
1,339 posts, read 2,973,263 times
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Hi:

Maybe this is the wrong topic in this forum, but I wanted to get some opinions from you experts.

I just sold my SFH in Vienna and made a nice $250K profit on it. I am considering using that money to buy a SFH around $750K in Oakton. Given that the mortgage rates are increasing, I wanted to keep the loan amount at $417K so as not to trigger the higher jumbo rate. Also, I do not want to take a second trust since I do not want to increase my monthly mortgage payment.

Which means, for a $750K home, I will be borrowing mortgage amount of $417K and putting down $333K of my own money. The split-up of $333K will be $250K from the profit of my current house and $83K from my savings. Since I am not dipping into my emergency funds, and my 401K and 529 plans are being regularly and sufficiently funded, is my strategy the correct one?

I know that I would be making a 44% down payment as opposed to the conventional 20%. That is, instead of investing my money I am plonking it down on a house. But my reasoning was that the mortgage rates are only headed higher (current rate: 6.25% on a 30-yr fixed), so what's the point in keeping the savings in a bank account or CDs (which have traditionally returned interest below inflation) or investing them in equities (which have traditionally returned 7-8% before tax). Might as well use it to reduce the monthly mortgage payment.

Please advise.

Regards,
K
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Old 07-19-2008, 06:56 AM
 
2,728 posts, read 7,369,547 times
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Heck yea! Pay more down and finance less!
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Old 07-19-2008, 08:48 AM
 
1,949 posts, read 5,321,999 times
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Post this on the mortgage forum. You'll get a lot of good advice.
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Old 07-19-2008, 10:09 AM
 
Location: TX
3,029 posts, read 10,670,166 times
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sounds good. and Oakton is a very good area with great schools and a good commute location.
Less intrest you pay is ALWAYS better...
PLUS with puttin +40% you may qualify for an even LOWER intrest rate..shop around. Check Navy credit union they have had really good rates in the past.

We go a very good rate with Wells Fargo..if we opend accounts with them.
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Old 07-20-2008, 01:53 AM
 
595 posts, read 2,101,435 times
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That sounds like a prudent plan to me. Make sure your kids aren't getting shifted over to South Lakes, though. Oakton is superior, and the home prices within its boundries reflect that.
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Old 07-21-2008, 08:17 AM
 
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Thanks everyone for your replies.

-K
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Old 07-21-2008, 08:45 AM
 
2,728 posts, read 7,369,547 times
Reputation: 1062
Quote:
Originally Posted by kutra11 View Post
Thanks everyone for your replies.

-K
Good luck!!!!
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