Should I sell some investments to make payments easier for a new mortgage?
August 27th, 2008 | by admin |smiles6428 asked:
I am about to purchase a condo from someone in my family. They are selling it to me for 78% of the appraised value so that I do not have to pay mortgage insurance. So, even if I sold it the day after I bought it, I could potentially make about 50,000. I am certain that my boyfriend and I will be able to make the mortgage payments on the house, but it will be tight. I have some money in investments, I was planning on not using any of the money until retirement, but should I use some of the investment money to go towards the home purchase so I don’t have to pay so much in the loan? Or should I just take out a certain amount, say $1,000 to have in a quick cushion account, in case I need to use 1 or $200 to help pay for mortgage? Over the past 12 years I have been getting a 12% return on my investments, which is GREAT. I’m not sure I will get anything close to this by putting the money into this house, except for the fact that I am getting the place for 78% of the apprised value. Thoughts?
I am about to purchase a condo from someone in my family. They are selling it to me for 78% of the appraised value so that I do not have to pay mortgage insurance. So, even if I sold it the day after I bought it, I could potentially make about 50,000. I am certain that my boyfriend and I will be able to make the mortgage payments on the house, but it will be tight. I have some money in investments, I was planning on not using any of the money until retirement, but should I use some of the investment money to go towards the home purchase so I don’t have to pay so much in the loan? Or should I just take out a certain amount, say $1,000 to have in a quick cushion account, in case I need to use 1 or $200 to help pay for mortgage? Over the past 12 years I have been getting a 12% return on my investments, which is GREAT. I’m not sure I will get anything close to this by putting the money into this house, except for the fact that I am getting the place for 78% of the apprised value. Thoughts?
4 Responses to “Should I sell some investments to make payments easier for a new mortgage?”
By zyberianwarrior on Aug 30, 2008 | Reply
take the quick cusion and put it in an online savings bank. good luck. 12% 12 years straight i’m impressed good job.
By Brian G on Sep 2, 2008 | Reply
If you can make the payments without the increased down payment, leave your retirement money where it’s at. And it wouldn’t make any sense if your investments are liquid to sell them now just to have them sitting around “just in case” you need the cash. If that comes up, sell them then.
By Miss V on Sep 4, 2008 | Reply
Obviously only you know how tight your finances could get. Purchasing the home is one thing. Remember there is the upkeep and the unexpected things like needing to replace a furnace, roof, etc.
Your investments’ value is known today. Not known for tomorrow. Your mortgage payments will be known. So using some of your investments to lower the mortgage may not be a bad idea. Your house is supposed to appreciate in value.
By Jeremy R on Sep 6, 2008 | Reply
12% return is great, I would not touch these investments to make a mortgage payment. There are many different mortgage options available on the market today. I would suggest shopping around and learning about the mortgages that are available on the market today. For example, if you could get a mortgage for less then what you are paying for living expenses today, by putting that saved money into your 12% return for the 3 to 5 years will be a better investment then paying a Principle and Interest mortgage.