| DAVES |
12-14-2020 04:24 PM |
Quote:
Originally Posted by roob1
(Post 1872853)
Scenario: Own home outright (value about 400K). Looking to buy smaller unit (300K), but don't want to use any contingencies in the sale/purchase. What would be the most economical option to purchase smaller unit before sale of current property? Want to avoid using IRA also. Would need about 350K in any scenario.
Bridge loan
Home Equity LOC on current home
Mortgage (maybe pay off w/in a year)
Tried using online resources but am looking mainly for generalized answers....I know there are no right/wrong answers, but the more input the better. I know I can meet with a bank rep., but not sure how biased they would be.
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No one could answer this for you with the information you have provided. You mention a bridge loan. First of all depending on your finances you may not be able to get one.
In any case there will be closing costs involved. You may want to talk to a financial advisor, a broker etc. What you want to do is not that unusual and I'm sure there are many ways to do this.
I'm no financial expert but you mention your IRA. Depending on your situation age etc,
I think you can, possibly, borrow from your IRA use that money to buy the smaller home,
sell your too big home within a year and put the money back into your IRA. Assuming you are old enough to withdraw from your IRA you do not pay the 10% penalty but you do pay tax at your ordinary income tax rate. A shock to many. We put the money in free of tax. It grew free of tax. The taxman will take his cut when you take the money out.
Pressure? People cause there own pressure. If, you think prices on what you want to buy are going up so is the value of what you already own. Selling a place you say is worth 400,000 to buy one worth 300,000 you will not pocket 100,000. Out of that 100,000 is sales commissions, closing costs, moving expenses furniture that you may be tired of or just does not fit. |
