Some background: We own a house in a recently rising market. We have about $150k of equity in it and are renting it out for $400 more than the mortgage, interest, taxes, and insurance cost. Currently renting a simple place closer to our jobs, but wanting to upgrade to a house as soon as it's practical. Savings are at $25,000 Roth IRA at $20,000 Both of us putting ~$10,000 into 401k each year Budget surplus of ~$25,000/year with our current expenses.
We'd like to get a $350k - $450k house in the area we're renting. This would mean ~$500/month extra in costs vs renting but with the benefit of locking in a bigger, nicer place to call our own. With rising prices and likely rising interest rates, sooner would seem to be better than later. We've been unable to find a lender who'll give us a HELOC or other home equity loan since it's an investment property.
So what to do? Pull out the Roth to get to a 10% downpayment and deal with the PMI? Minimize 401k contributions and wait until we have a 20% down payment in cash? Find a lender who will provide a HELOC on an investment property? Sell the house in the city before we have to pay capital gains in order to access the equity?
I'd be greatly appreciative of what the collective has to say about this. Thanks in advance.
Submitted February 14, 2018 at 08:16AM by SciGuy45 http://ift.tt/2o63u64
