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Old 05-14-2019, 07:13 AM   #61
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I am with corn.

I hope it works out for OP, but he seems to be confusing assets with consumption/lifestyle (see quote about unlike vintage cars, you can't drive mutual funds on a sunny day).



If you can't comprehend vintage cars as assets, you probably never will. Whether I drive it or not, and the end of the day it's all still just math.


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Probably much many more in our culture view things this way and I am the oddball.

I guess following the likes of The Millionaire Next Door, has me on a heightened awareness of this sort of thing.

We all have different values/motivations. We could all look at OP's results 10 years down the line and all come up with very different conclusions on whether it was a good deal or not.

True. Read that book too BTW.
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Old 05-14-2019, 08:07 AM   #62
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Quote:
Originally Posted by gauss View Post
I am with corn.

I hope it works out for OP, but he seems to be confusing assets with consumption/lifestyle (see quote about unlike vintage cars, you can't drive mutual funds on a sunny day).

Probably many more in our culture view things this way and I am the oddball.

I guess following the likes of The Millionaire Next Door, has me on a heightened awareness for this sort of thing.

We all have different values/motivations. We could all look at OP's results 10 years down the line and all come up with very different conclusions on whether it was a good deal or not.

OP -- In all seriousness, thank you for sharing and not getting outwardly annoyed with the comments. I do find it interesting. It helps me to expand my thinking and understand, at a deeper level, the thinking of others.


-gauss
"I, personally, would not have eaten the marshmallow"
I'm kind of curious about the OP's purpose in asking the original question. He had to be pretty certain most of the answers would be on the "don't do it" side.

Do either corn or I know if he can actually afford this house? No we don't, because he hasn't shared any numbers, which is his right.

The dithering about the mortgage and the amount of the down payment is nothing in the grand scheme of can I actually afford this place. Comparing a vintage car to a house, is apples to oranges. In one post he says it's the forever home and then he says it could be the forever home and implies it might be a unique opportunity.

Basically they cannot afford two house payments on his DW's salary. They don't have extra cash to make the down payment he is comfortable with. His DW has to work at least 3 more years to even make this possible. He wants to raid money set aside for a 40 year retirement but his biggest concern is not wanting to pay extra taxes on it. There is no mention of the DW still putting money into her 401K, if she is would she just put in the match amount perhaps freeing up some money.

Right now to me it looks like a case of "one more year" for the OP would have made this a bit easier but he pulled the plug at 54. Now it's all about some hard choices. Good Luck
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Old 05-14-2019, 08:15 AM   #63
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If you have significant non retirement(non tax deferred) accounts a margin type loan has no closing costs- and would work short term. Rates are usually higher than a mortgage but it is far easier to obtain. (can usually margin 50% of an account balance). May sure you have enough in account not to have it called if the market turns south.
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Old 05-14-2019, 08:46 AM   #64
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Originally Posted by ivinsfan
I'm kind of curious about the OP's purpose in asking the original question. He had to be pretty certain most of the answers would be on the "don't do it" side.

I wasn't. At all. Nor does that really matter. At the end of the day I go by my gut. That being said, again, I got some great insight here that helped guide my decision, numbers. Thank you, it's been fun. And while I am not interested in trying to convince anyone here that this is a good or bad idea, to put it in overall $$ perspective the 2nd home cost represents just under 19% of portfolio and just under 14% of NW. The 2nd mortgage amount will be 11.3%/8.35% I am comfortable with being able to "afford" that.



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OP -- In all seriousness, thank you for sharing and not getting outwardly annoyed with the comments. I do find it interesting. It helps me to expand my thinking and understand, at a deeper level, the thinking of others.
No problem at all. Not my first rodeo on forums by any means. Always some people with stronger opinions than others (myself included). We all have different risk/reward tolerances. Yes, this is going to be a leap, but after week of trying to convince myself that it is a bad idea, and/or that there aren't "outs".... and failing, we are moving ahead. Just got off the phone with an attorney... time for lunch yet??
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Old 05-14-2019, 08:46 AM   #65
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To answer the actual question, I would get a mortgage with 20% down and a 5/1 ARM. I did that just this year when I moved for my job. I haven't sold my current house yet and bought a new house with a 20% down 5/1 ARM. I could have raided my taxable and Roth accounts to put a lot more down, but that did not make sense to me.

As it sits right now, we have a contract to sell our old house and it should close in June. We also have a lot of stock vesting soon. Between the house proceeds and the stock vesting, we should have enough to pay off our current mortgage. Maybe we will, maybe we won't. A lot could change between now and August. Having a mortgage @ 2.7% net (37% marginal tax rate) and a boatload of cash in FZDXX earning 2.3% seems like a great position to be in vs. having a small mortgage and strapped for cash.

You should do the same. Keep all of your retirement savings intact. Get the biggest mortgage you can. When everything settles down, re-evaluate. Worst case is you're out a few grand in arbitrage. But if the SHTF, you have a lot of options with a lot of cash.
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Old 05-14-2019, 08:55 AM   #66
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Great read. Thanks for sharing and updating.
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Old 05-14-2019, 08:59 AM   #67
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Great read. Thanks for sharing and updating.

Thanks, I hope I will be updating with some pics in mid July.


We are getting a 7/1 ARM BTW. 3.75% IR.
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Old 05-14-2019, 09:37 AM   #68
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Don't forget the pics, we're all curious now.

Good Luck the purchase and closing go smoothly...
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Old 07-15-2019, 06:37 PM   #69
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Closing tomorrow AM.
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File Type: jpg drone_1.jpg (520.6 KB, 71 views)
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Old 07-15-2019, 06:48 PM   #70
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It looks like the home needs a boatdock if it does not have one.

And then, a boat for the boatdock.
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Old 07-16-2019, 04:59 AM   #71
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^^^ And so it starts....
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Old 07-17-2019, 12:01 PM   #72
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I'd caution on borrowing and buying a property first then try to sell your existing property later and counting on that proceeds to pay back the loan on the first purchase, only do that if you can afford to carry both properties. Although housing market had been going crazy for several years, there is visible softening since last summer in many markets. I personally know someone purchased a home with short-term loan expecting to pay it back quickly after the old home is sold, because the market was so hot a year ago. Guess what, the old home has been on the market nearly 3 months now and the price has been cut by more than $100K, and still no offer.
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Old 07-17-2019, 01:07 PM   #73
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Closing tomorrow AM.
Is the Helicopter needed to get there?
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Old 07-18-2019, 08:30 AM   #74
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Closing tomorrow AM.

Wow. That's beautiful. Where is it located?
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