retiringby50
Recycles dryer sheets
- Joined
- Nov 26, 2007
- Messages
- 170
Should I sell the mutual funds or take out two lines of credit?
Background
Not sure what we've done here, but I'm refusing to have buyer's remorse! We want to remodel our current house because we feel we will live in it "forever." Family is here, we're entrenched in the community, etc., and there is no better place to live than in a suburb of San Francisco. Even if DD grows up and moves away for her job, we're staying here, so we want to have our home done in a way to fit our needs. Construction will cost $120K and take 9 months (conservative estimates - I've already added 20% on top of what we think it will be in both cost and time). Due to the excavation, dust, etc., we won't live in it while remodelling.
My husband, who is adverse to paying rent, decides that we're going to buy another house to move in. Otherwise, we'd either be paying about $22K in rent ($2400 x 9 months). We offered and got the home. Unless the inspection stinks, it's ours in 15 days! In case anyone is curious, it was $500K for a 4 bedroom, 3 bath, single family detached home; in move-in condition, it's worth about $750K. But it also needs some work (carpet, paint, possible some bathroom/kitchen work). Conservatively, about $50K and will probably take about 2 months. We would be using this as rental property after we move back.
Coincidentally, I have two lines of credit available on my current home that equals $500K! I owe about $200K on this home, and it's worth about $750K. I have about $450K in mutual funds that I had just invested in... January 2008! My initial thought was to use one of the $250K lines of credit and sell $250K of mutual funds to pay for the home, but what do you think?
1. Is there a strategy here that I need to know about? Is it better to not use both equity lines of credit?!
2. If I should sell my mutual funds, is there a strategy to it? Do it all at once, spread it out over the next two weeks?
3. When selling, do I pick the funds that have lost the most money? Or does it really matter in the end? I guess I DO need to make sure I don't sell anything w/gains (I doubt there are any anyway) so that I don't pay short term capital gains tax.
4. Anything else?
As always, thanks!
Background
Not sure what we've done here, but I'm refusing to have buyer's remorse! We want to remodel our current house because we feel we will live in it "forever." Family is here, we're entrenched in the community, etc., and there is no better place to live than in a suburb of San Francisco. Even if DD grows up and moves away for her job, we're staying here, so we want to have our home done in a way to fit our needs. Construction will cost $120K and take 9 months (conservative estimates - I've already added 20% on top of what we think it will be in both cost and time). Due to the excavation, dust, etc., we won't live in it while remodelling.
My husband, who is adverse to paying rent, decides that we're going to buy another house to move in. Otherwise, we'd either be paying about $22K in rent ($2400 x 9 months). We offered and got the home. Unless the inspection stinks, it's ours in 15 days! In case anyone is curious, it was $500K for a 4 bedroom, 3 bath, single family detached home; in move-in condition, it's worth about $750K. But it also needs some work (carpet, paint, possible some bathroom/kitchen work). Conservatively, about $50K and will probably take about 2 months. We would be using this as rental property after we move back.
Coincidentally, I have two lines of credit available on my current home that equals $500K! I owe about $200K on this home, and it's worth about $750K. I have about $450K in mutual funds that I had just invested in... January 2008! My initial thought was to use one of the $250K lines of credit and sell $250K of mutual funds to pay for the home, but what do you think?
1. Is there a strategy here that I need to know about? Is it better to not use both equity lines of credit?!
2. If I should sell my mutual funds, is there a strategy to it? Do it all at once, spread it out over the next two weeks?
3. When selling, do I pick the funds that have lost the most money? Or does it really matter in the end? I guess I DO need to make sure I don't sell anything w/gains (I doubt there are any anyway) so that I don't pay short term capital gains tax.
4. Anything else?
As always, thanks!