googily
Full time employment: Posting here.
- Joined
- Jul 6, 2013
- Messages
- 793
Hi--
I've recently received $250,000 from the sale of inherited land.
I have had it in my mind for awhile now I would use $170,000 of that money to buy a house that's a part of the same estate. Not to rent out or anything, just to keep it in the family and to hopefully use it as a summer home in future years. (I am well aware of the carrying costs, which look to be about $5,000 yearly, and potential headaches, and have made peace with that. Mostly. )
DH and I currently have $280,000 in taxable accounts (separate from this $170k) and about $1.3 million in our retirement holdings, as well as pensions awaiting both of us. I also own another piece of unimproved land that's worth about $200,000. HHI is about $220k.
Our 3.625% mortgage on our primary home is about $320,000, and the house just appraised at $866,000. We recently opened up a $370k 10 year-term HELOC at 3.625%, just to have in advance of any FIRE.
No other debts. We're in our late 40s/mid 50s, no kids, still working (though would love to change that before long). Also not intending to be the richest people in the graveyard when that time comes.
It suddenly just seems kind of dumb from a liquidity standpoint to tie up that whole $170k in the house. So we are wondering about using the HELOC to pay some or all of the cost of the house, while investing the remaining cash somewhat conservatively in Vanguard funds (50/50) in a way that, should the stars align, could throw off enough to pay the interest on the HELOC. And then, at the end of the 10-year HELOC term, pay the principal off from the invested amount. We could also get a three-year fixed-rate advance on the HELOC, lock in the current rate, and pay interest and a smidgen of principal for 36 months before the remaining would return to the main HELOC line.
We aren't dummies about the real risk of interest-rate rises, stock market corrections, etc., and are very much buy-and-hold types.
It certainly isn't a conservative maneuver, but it doesn't seem like a completely boneheaded idea either, given the rest of our holdings and given that, at any time, we could liquidate the invested money and pay off the HELOC (at a possible loss, sure, but not a $170k loss). And of course it's also possible we could decide that keeping the house isn't a great idea, either, and sell it. I don't expect this house, given its location, to skyrocket in appreciation.
Thoughts?
I've recently received $250,000 from the sale of inherited land.
I have had it in my mind for awhile now I would use $170,000 of that money to buy a house that's a part of the same estate. Not to rent out or anything, just to keep it in the family and to hopefully use it as a summer home in future years. (I am well aware of the carrying costs, which look to be about $5,000 yearly, and potential headaches, and have made peace with that. Mostly. )
DH and I currently have $280,000 in taxable accounts (separate from this $170k) and about $1.3 million in our retirement holdings, as well as pensions awaiting both of us. I also own another piece of unimproved land that's worth about $200,000. HHI is about $220k.
Our 3.625% mortgage on our primary home is about $320,000, and the house just appraised at $866,000. We recently opened up a $370k 10 year-term HELOC at 3.625%, just to have in advance of any FIRE.
No other debts. We're in our late 40s/mid 50s, no kids, still working (though would love to change that before long). Also not intending to be the richest people in the graveyard when that time comes.
It suddenly just seems kind of dumb from a liquidity standpoint to tie up that whole $170k in the house. So we are wondering about using the HELOC to pay some or all of the cost of the house, while investing the remaining cash somewhat conservatively in Vanguard funds (50/50) in a way that, should the stars align, could throw off enough to pay the interest on the HELOC. And then, at the end of the 10-year HELOC term, pay the principal off from the invested amount. We could also get a three-year fixed-rate advance on the HELOC, lock in the current rate, and pay interest and a smidgen of principal for 36 months before the remaining would return to the main HELOC line.
We aren't dummies about the real risk of interest-rate rises, stock market corrections, etc., and are very much buy-and-hold types.
It certainly isn't a conservative maneuver, but it doesn't seem like a completely boneheaded idea either, given the rest of our holdings and given that, at any time, we could liquidate the invested money and pay off the HELOC (at a possible loss, sure, but not a $170k loss). And of course it's also possible we could decide that keeping the house isn't a great idea, either, and sell it. I don't expect this house, given its location, to skyrocket in appreciation.
Thoughts?