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Buying a new question

Discussion in 'Other Off Topic Forum' started by Enzo, Feb 10, 2004.

  1. Enzo

    Enzo F1 Rookie

    Feb 14, 2002
    4,077
    MinneSOta
    Full Name:
    Pat Pasqualini
    We are starting the process of selling and buying our next house. Our current house we will stand to make about 95k on and would like some opinions on what to do with the money we make from equity. Our money guy tells us to put only 5% down on the next house but tells us to keep in mind that the general rule of thumb is to not buy more than 2X your total combined income. If that is the case we would need to stay in our house now. If we put the entire 95k into equity then we can get a better house with what we need in a house. Is it safe to assume that our "money guy" is just trying to make more commission off of us with the money he wants to invest?

    Any opinions would be greatly appreciated,

    Pat
     
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  3. Dom

    Dom F1 Veteran
    Rossa Subscribed Owner

    Nov 5, 2002
    7,835
    Southern California
    Full Name:
    Dom V.
    Why would you want to put only 5% down and pay PMI?

    Dom
     
  4. Enzo

    Enzo F1 Rookie

    Feb 14, 2002
    4,077
    MinneSOta
    Full Name:
    Pat Pasqualini
    That is my question as to why he would point us in that direction. I think what he is getting at is he would like to see us take our equity and invest with him.
     
  5. KevinW

    KevinW Karting

    Nov 4, 2003
    106
    Phoenix, AZ
    Full Name:
    Kevin
    Pat, if it were me (and this is my opinion, of course), I would put the 95K into your next home -- but only buy what you can afford and feel comfortable with. If the 95k would help you get into the home that has the features you need, then you should put it towards that.

    The only way I would invest the equity from a previous home is if maybe I was downsizing and my payments were equal or less than my previous home by taking the 95k equity out.

    I feel that real estate is a good investment overall, but if you feel comfortable with taking the 95k and maybe taking a hit with it by investing it (or on the flip side -- possibly making a greater return than with your home!), then go for it.

    Also, look into the future. I'm not sure how old you are or if you are thinking about retirement anytime soon but that would also be a big factor you need to take into consideration.

    Kevin
     

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