Need help on investment/new home question
I'm in the process of moving into a new home valued around 195k. My savings and investments are currently 35k and 25k respectively. My investments I'm averaging a gain of 5-7% over the last couple of years. I make roughly 60k a year pre-tax and have a credit rating of 805ish. Now the home I'm looking at is in northern Texas, Lubbock area to be exact, and I don't know if this is a question for real estate agents or mortgage guys. Would it be more cost-effective if I liquidated some of my investments to invest in this house, betting on the house's equity to outpace my current investments (obviously not in the short term, but in the 10-15 year range)? What would I expect mortgage rate wise for this scenario? by daniel_689_297 from Lubbock, Texas. Nov 30th 2011
David Webber (DavidWebber)
#57 ranked lender in Texas - 71 contributions
Daniel, There is no safe bet, however being a tech graduate I have seen the housing industry go up and down. Right now it is on a swoop up and should hold prices. My theory with all investments retirement or such is that you base it around your long term goals. Rates are hovering 4% so with that said it is all about your payment and cost to finance. Call me if you need any additional help. 1-940-566-5363 ext 130 Thanks David Webber
Timothy Singleton (TimSingleton)
#55 ranked lender in Texas - 15 contributions
My opinion would be not to do that. Unless this home is truly an investment property you are looking to flip I would leave my money in the market as scary as that may be. I am not an investment professional, but I never like the idea of taking money out of investments such as an IRA or 401K to invest in a home. Over 10 - 15 years, you are going to enjoy compounding interest on your investments and I am certain you will continue to contribute towards those.
Brian Allen (ballen)
#43 ranked lender in Maryland - 193 contributions
Daniel, personal residence in my opinion should never be an investment your buying the home for it's attributes not for investment or quick appreciation. With rates so low finance your new home purchase with little down keeping your investments in tact continue to build on your investments should your new home appreciate it becomes a win, win. Better Service I can be reached at ballen@accessnational.com.
Patrick McCarthy (PatrickM)
#22 ranked lender in Ohio - 196 contributions
Hi Daniel.Personally, this is not a question for either a realtor or mortgage pro. This is a question for you and your financial planner to answer. I would put as little as possible down and take the unused downpayment money and invest in a higher yielding portfolio. Pat McCarthy
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions
Hey Daniel, my advise is use as little of your funds as possible. Cash is King!!!... traditionally you need 20% down for investment properties, however there are a few programs out there that allow you to purchase with less than 20% down. Contact a local mortgage broker, not a bank and apply with them. They have access to numerous lenders and can find the right lender match for your particular scenario. WilliamAcres.com
Michelle Curtis Loan Originator NMLS 401173 (MichelleCurtisLO)
#77 ranked lender in Florida - 2,245 contributions
Hi Daniel, I have to say I agree with PatrickM. I would speak to your financial planner before liquidating any of your assets. If you would like to discuss further feel free to contact us. Michelle& Benny 201-962-3555 TeamAmbassador@BestMortgageOption.com
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