Hello everyone, I am a new joiner to the forums but a long time subscriber to the goal of FIRE!
I am a little unsure on how to proceed and so I am seeking guidance and opinions.
DW and I are looking to buy a home sometime this year. The price point of the home is about $600k (we live in NY, so the home isn't anything spectacular).
My choices are:
Choice A:
Put 20% down and get a mortgage and pay it off over 30 years (likely sooner with some extra payments and such)
Positive: Keep savings intact
Negative: Will have a sizable expense even after we both retire (me in 5 years DW in 15 years)
Negative: Savings are exposed to the stock market, which has appreciated nicely. Maybe we should harvest some of the gains?
Choice B:
Purchase home with cash. We have $310k in cash, will raise $100k by borrowing from our 401ks ($50k for each, which we will pay back) and will sell about $190k in investments in our taxable account, which will incur long-term capital gains tax.
Positive: We will not have a mortgage payment when we stop working
Positive: Without the mortgage payment, we will be able to save more while we are both working to recover some of the savings/investments we sold.
Positive: We are taking some money off the table from the stock market and "pocketing some of the gains".
Negative: Our savings will be depleted by roughly 20%.
Negative: We will be taxed at long term capital gains.
Hopefully this is enough information to solicit some opinions. Thank you all in advance and best of luck in the pursuit of FIRE.
I am a little unsure on how to proceed and so I am seeking guidance and opinions.
DW and I are looking to buy a home sometime this year. The price point of the home is about $600k (we live in NY, so the home isn't anything spectacular).
My choices are:
Choice A:
Put 20% down and get a mortgage and pay it off over 30 years (likely sooner with some extra payments and such)
Positive: Keep savings intact
Negative: Will have a sizable expense even after we both retire (me in 5 years DW in 15 years)
Negative: Savings are exposed to the stock market, which has appreciated nicely. Maybe we should harvest some of the gains?
Choice B:
Purchase home with cash. We have $310k in cash, will raise $100k by borrowing from our 401ks ($50k for each, which we will pay back) and will sell about $190k in investments in our taxable account, which will incur long-term capital gains tax.
Positive: We will not have a mortgage payment when we stop working
Positive: Without the mortgage payment, we will be able to save more while we are both working to recover some of the savings/investments we sold.
Positive: We are taking some money off the table from the stock market and "pocketing some of the gains".
Negative: Our savings will be depleted by roughly 20%.
Negative: We will be taxed at long term capital gains.
Hopefully this is enough information to solicit some opinions. Thank you all in advance and best of luck in the pursuit of FIRE.