options for down payment on next home

[mrWinter]

Quote:

Originally Posted by ivinsfan Do you have 100K and some emergency funds..You know that was a pretty detail to leave out.

Yes, good point, I hadn't read your post mentioning the emergency fund before I replied to the other. I guess I try and not reveal more details about my exact financial situation than needed online, but perhaps I can't really solicit helpful info if not. In for a penny in for a pound here I guess.



I have 80k in money market and 37k in checking account now. Of that I'd like to reserve 10k for slush fund, leaving me 107 currently in deployable cash. I wouldn't really call 10k an 'emergency' fund, a real emergency fund would be bigger for me, I don't really know what would make me comfortable 60k maybe? So admittedly during the transition period I'd be running lean, in a risky spot, on the highwire a bit, until I sell my house and then get that extra 40k or more to replenish the emergency fund. So yes I do see the risk there, if I or my wife lost our jobs between when we bought the new house, and when we sold the current house, we'd be in a pickle.

[pb4uski]

Perhaps you could go with a contingent sale approach to begin with (which you can do right now) and continue taxable saving and once you have the needed downpayment without needing to sell you could shift.

I once had two mortgages for a couple weeks and didn't like the feeling... our existing house was under contract with no remaining contingencies and the real estate agent made us a bridge loan from the buy until the old house closed.

[mrWinter]

Quote:

Originally Posted by ivinsfan I don't know about slanting but it seems you want to get a house NOW, why is that?

Doesn't have to be NOW, but sooner rather than later, and summer of 2022 at the latest. Kids will be going to kindergarten then and I want them to be in our next neighborhood for that. I may well happily take a year to move and will by then have saved more, but not 50k. If I take 3 years, then by then I could have saved enough cash, but that's cutting it down to the wire with entering kindergarten, not leaving much time to shop around, and I'm feeling the call of the burbs to move on the sooner side. A quieter street, safer streets for kids, less crime, maybe a little more backyard space, etc. I'm getting hot to trot because we've been looking at neighborhoods and houses lately and I'm getting stoked for a move, but can chill for a while.

I could save more money faster and knock out this whole issue in a year and a half or so if I took a hiatus from, or reduced my retirement account saving, but that seems sacrilege to me. I'd rather put the money in tax advantaged accounts, as opposed to having the money ultimately end up in after-tax funds.

I'm trying now to get my ducks in a row and make a plan in case a good opportunity shows up that I'd really like, I can I move on it, and I know how best to do so. The inventory in the neighborhoods we are looking at is not immense, and rehab opportunities less so. I don't need to move by the end of this year, but if the right thing shows up it would be cool to jump on it, and I don't think the situation will materially change anytime in the next 2-3 years such that I wouldn't need to utilize one of those 4 options, unless I temporarily weaken my retirement saving effort.

[mrWinter]

Quote:

Originally Posted by pb4uski Perhaps you could go with a contingent sale approach to begin with (which you can do right now) and continue taxable saving and once you have the needed downpayment without needing to sell you could shift. I once had two mortgages for a couple weeks and didn't like the feeling... our existing house was under contract with no remaining contingencies and the real estate agent made us a bridge loan from the buy until the old house closed.

Yes that's good thinking. I have experienced the double mortgage thing before, except one of them was rent for me. When i rehabbed my current home I was renting for those 6 months. Definitely don't love that. And I need to budget for those double payments during that period too as extra cash on hand I'd need.

[W2R]

I don't know what you should do. I could be wrong but honestly I don't think there is a right answer because we don't know the future. But anyway, here's what I did.

After retiring, I looked online every day for my "Dream Home" for about four years before I found it. I wanted to buy it in cash, like I had done for my previous home. While looking, I was piling up cash with this in mind.

When I unexpectedly and suddenly found it, I jumped on it and had a full price cash offer in before it even hit the MLS. It was a hot market at that time, so I had to put in an aggressive offer ASAP in order to get the house. I didn't have enough cash piled up yet to cover my offer, so I sold some of my taxable portfolio to get the cash and took a tax hit for doing that due to capital gains. Then after moving into my Dream Home I sold my old house in four days and put most of the money from that sale back into my investments at Vanguard (well, minus the "fix up" costs, closing costs, moving costs, etc).

Probably not smart to take that tax hit! But I *DID* get the house I wanted and as you all know by now, for me that was a Big Deal. Maybe not for others, but for me living in this house has been truly a highlight of my life.

Luckily prices went up in this neighborhood so both Zillow and realtor dot com say my present home is worth more than 150% of what I paid for it four years ago. Not that I'm selling; but the point being that if I had waited to pile up more cash, I would have had to pay considerably more for a house of this type.

In other words, I did not purchase it in an ideal way, but in time it all worked out.

[nobody]

I'm trying to sell my house and buy a new house right now. My buyer is having issues getting financing. The first bank rejected him and hes working with a new lender now. I'm at one month past closing. Hopefully it will get sold this week.


I didn't look for a new house till I was under contract on old one. Will be paying cash for new house once old house sells.



I rejected any offers with contingency. Why have the house off the market and loose a better buyer?



Confirm with your lender before you make a choice. Lenders are scrutinizing everything these days and are horrible. Both of my agents are not pleased with how lenders in general are acting. Especially with the know before you owe rule.



Find a good lender, maybe not the cheapest interest rate, the one I used kept the loan in house, once I hit 20% called them up PMI was removed, some lenders will make you get another appraisal.

[ivinsfan]

OP, it won't ruin your kids to move them after kindergarten or even 1st grade. You are like everyone in the human race and want a perfect solution. Don't let perfect be the enemy of good enough.

Yes DIY can help build instant equity in a home but it costs time and money. Why don't you funnel a little more into the cash side in prep for this home swap. Also do whatever is necessary to prep your current home for a quick sale. Be prepared to use a less then ideal solution and then live with it. IOW pick your poison. Since you have a home, a lot of people here are going to lean toward staying put and making the 20% down/

[ivinsfan]

Quote:

Originally Posted by nobody I'm trying to sell my house and buy a new house right now. My buyer is having issues getting financing. The first bank rejected him and hes working with a new lender now. I'm at one month past closing. Hopefully it will get sold this week. I didn't look for a new house till I was under contract on old one. Will be paying cash for new house once old house sells. I rejected any offers with contingency. Why have the house off the market and loose a better buyer? . Confirm with your lender before you make a choice. Lenders are scrutinizing everything these days and are horrible. Both of my agents are not pleased with how lenders in general are acting. Especially with the know before you owe rule. Find a good lender, maybe not the cheapest interest rate, the one I used kept the loan in house, once I hit 20% called them up PMI was removed, some lenders will make you get another appraisal.

Well at least a contingency buyer actually has a house to sell. From past experience with family you need to relist your home and tell your buyer you are accepting new offers.

[nobody]

Quote:

Originally Posted by ivinsfan Well at least a contingency buyer actually has a house to sell. From past experience with family you need to relist your home and tell your buyer you are accepting new offers.

It is relisted, market has cooled off some and people are less likely to look at a house thats been on the market for 90 days.

[ivinsfan]

Quote:

Originally Posted by nobody It is relisted, market has cooled off some and people are less likely to look at a house thats been on the market for 90 days.

So you gave your buyer 60 days to close and he didn't make it. That's too bad but it happens and more often then you think. Hope something works out quickly.