FIRE'd and Now Buying a New Home?!?

[pjigar]

My only question would be if the new house changes your spend significantly. Ours did, but so far well worth it. More switching costs than we anticipated, as we’ve done improvements on the house, but they have been discretionary and the funds have been there.

This is a very good point. Our utility bills more than doubled when we switched out from 3500 sqft (medium ceiling) home to 5000 sqft (high ceiling) home. We are about to move in to a 2400 sqft house (low ceiling) where utility bills will be 4 times less than current 5000 sqft house.

 

[cat4ever]

1) At first I thought you could take a loan from your 401k's but I think the limit is only $50k (although the CARES act extended this to $100k temporarily) and you have to pay it back with after tax dollars which then means you are taxed again on the future when you withdraw from the 401ks in retirement.

I've seen this quote before, but it should be kept in mind that you're spending the loaned money without paying any taxes on it, nor is it moving you into a higher tax bracket in the process, so the fact that you're paying back the loan in after tax dollars over time seems at worst like a wash to me.

 

[ERD50]

I have accounts at E-Trade, but for the line of credit they won't let you use IRAs as collateral, and I don't have the required 50K in a non-IRA account. If I were to add enough to get to 50K what would the max loan I could get likely be? Would I have to maintain 50K in the account?

Sorry, I missed this post.

I got a LOC for ~ 65% of the account value. That account is ~ 90/10, with the 90 made up of BRK, IWM, and SPY (so broadly diversified), and 10 ~ FTBFX (bond fund).

Not sure how much of the calculation is based on the asset mix, I imagine ETRADE could answer that for you. But it seems they'd give a higher % to a more stable investment, like bond funds.

And yes, you'd have to maintain enough to cover the loan ( that's what backs it and provides the low rates), at the % they state.

-ERD50