My wife and I are relocating for work and are in the process of selling our home and purchasing a new one in a city a few hours away. We should walk away with about $150k profit once our current home sells.
Our current home was going to be a forever home and was just refinanced last year to a 20 year fixed $435k mortgage and our monthly payment is about $3400/month currently. We had no plans on moving but the new job was too good of an opportunity to pass up so here we are.
We are looking at spending no more than $650k on the new home but we are conflicted on whether we should take the profit from the sale of our home and put 20% down ($130K) to lower our monthly payments (they would be about 3k after taxes and insurance) or just put roughly 5% down ($35k) and pay the PMI (which is quoted at approx $120/month) and have a similar $3400 monthly payment for 30 years and invest the rest in an index fund that tracks the total stock market.
I know on paper the math says the stock market will consistently beat out the 3.25% interest rate we will have on the mortgage but is there anything else i am not considering at this point? Obviously it sucks to pay PMI and have the higher monthly payment for an extra 10 years than we were initially expecting after our current refinance but it seems like investing the extra $115k now will end up being the most advantageous for long term growth.
Any input is appreciated
Submitted January 13, 2022 at 09:37AM by WalterWhiteBoy16 https://ift.tt/33wstI2
