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07-19-2008, 07:46 AM
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Member
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Join Date: Jul 2008
55 posts, read 42,222 times
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Financial advice related to buying a home. Please advice.
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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07-19-2008, 07:56 AM
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The Moderated
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Join Date: Feb 2008
Location: Old Dominion
1,665 posts, read 1,215,035 times
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Heck yea! Pay more down and finance less!
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07-19-2008, 09:48 AM
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Senior Member
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Join Date: Jan 2008
1,497 posts, read 1,126,680 times
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Post this on the mortgage forum. You'll get a lot of good advice.
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07-19-2008, 11:09 AM
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Senior Member
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Join Date: Feb 2007
Location: TX
1,812 posts, read 2,048,048 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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07-20-2008, 02:53 AM
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Not a member
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Join Date: Jun 2008
596 posts, read 500,184 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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07-21-2008, 09:17 AM
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Member
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Join Date: Jul 2008
55 posts, read 42,222 times
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Thanks everyone for your replies.
-K
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07-21-2008, 09:45 AM
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The Moderated
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Join Date: Feb 2008
Location: Old Dominion
1,665 posts, read 1,215,035 times
Reputation: 296
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Quote:
Originally Posted by kutra11
Thanks everyone for your replies.
-K
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Good luck!!!!  |
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