Throwaway account.
I had an offer accepted on a house in a high cost of living area. The amount was for $580,000. A 20% down payment would be 116k. That would leave the remaining 464k for financing. That amount makes the loan "high balance" which results in an interest rate of 3.99% for a 30 year term .
On the other hand I have 40k available in stocks (and then some, I won't be dry after this) right now. I could cash them out and have the loan balance be 424k. This would result in an interest rate of 3.75% for a 30 year loan. Additionally we could do a 20 year and have the rate come down to 3.625%.
So the question is what makes the most sense? If I pull the money out, I lose some potential for growth (let's say about 7% per year on average), but I get a lower rate which will let me reinvest they money over time. My hunch says get the lower rate and the numbers on a first pass seem to agree. Beyond that will the 20 year make sense? It's not a big drop in the rate. All of these interest rates came from a lender I have been working with (using yesterday's rates).
One last note, let's assume that the mortgage (plus taxes and insurance) will be affordable for all three possible loans (but not a 15 year).
Thanks in advance!
Submitted August 09, 2017 at 10:30AM by throwaway_pf01 http://ift.tt/2vEIx8k
