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see i got this friend named joey joe joe junior shabadoo who is going to buy a house
say he can pay cash for it or take out a mortgage and put 20% down
if he takes out a mortgage at 4% then he can put his cash in other investments
so what does he do? get a mortgage and try to find returns better than 4% to make up for the interest payments?
or pay cash for the house? either way this guy still has investments, but just less of it if buying the house with cash
Depends on if he needs the cash for emergencies or not. I'd say the house will appreciate at a faster rate than the stock market, so that's a better use of the funds from a pure investment perspective. But if you run into a hiccup and need cash, you'd have to get a HELOC vs having the funds available in an investment account.
I like the idea of putting 20% down and paying higher amounts so you knock it out in like 10-15 years. Still keeps cash in your account/ investment opportunities but also keeps life time interest payed WAY lower. That’s what we do
For a 300k house your pay $172,000 in interest that's insane to me! Add $500/ month extra to each payment or get real crazy and split them up to make bi-monthly payments depending on how you get paid and you can cut that total interest paid by like 100k.
see i got this friend named joey joe joe junior shabadoo who is going to buy a house
say he can pay cash for it or take out a mortgage and put 20% down
if he takes out a mortgage at 4% then he can put his cash in other investments
so what does he do? get a mortgage and try to find returns better than 4% to make up for the interest payments?
or pay cash for the house? either way this guy still has investments, but just less of it if buying the house with cash
If you're in CA, put the least amount down and let the thing appreciate. Invest the rest making 10%/yr.
This friend could keep all his money in the stock market, and get a line of credit on it for the down payment @ less than 4%. This is how I'm buying and rehabbing rentals without using cash. When the house is rehabbed and refinanced into a 30 yr note, I have less into the house than it's worth and am able to pocket the difference and repay the line of credit, and have 25% or more equity in the home. The line of credit costs about $1.30 per day for every $10k borrowed.
So i'll be at the Long Beach Grand Prix this weekend and have been asked to speak at the Racing Goes Safer seminar. It's quick and easy. But one of the guest speakers in David Hobbs.
If you're in CA, put the least amount down and let the thing appreciate. Invest the rest making 10%/yr.
This friend could keep all his money in the stock market, and get a line of credit on it for the down payment @ less than 4%. This is how I'm buying and rehabbing rentals without using cash. When the house is rehabbed and refinanced into a 30 yr note, I have less into the house than it's worth and am able to pocket the difference and repay the line of credit, and have 25% or more equity in the home. The line of credit costs about $1.30 per day for every $10k borrowed.
I assume the bank does not know the loan is being used for a down payment? With CA housing prices a DP + rehab loan is pretty darn big - wait, was that 4% the loan APR or the DP amount? I suppose if you have equity elsewhere, good income and good credit they don't care so much what you're doing with the money? Maybe I should look into this, fiancé and I have been wondering how we can find some kinda new revenue stream.
Originally Posted by Reyes
So i'll be at the Long Beach Grand Prix this weekend and have been asked to speak at the Racing Goes Safer seminar. It's quick and easy. But one of the guest speakers in David Hobbs.
Jared, I'm disappointed your mug isn't on that flyer! I'm sure you'll be busy and/or exhausted after sitting in the sun all day but hit me up if you want to cruise by, I'll probably be wrenching all day.
I failed in my quest to secure a second ride with Mario at Long Beach. I came in second in a trivia contest at the Honda booth. I was tied with an older dude but he was more versed in Mario’s career as I was since the tie breaker question was the date and race of his first IndyCar race.
I tried a few hours later with the scavenger hunt (that’s how I won the ride at Sonoma) but they wouldn’t let me compete again.
I got a free Acura multi tool and power bank at the Acura booth. A PY ITR was on display with 4,471 miles. Not sure if it was Peter Cumningham’s or from the Honda museum in Torrance.
see i got this friend named joey joe joe junior shabadoo who is going to buy a house
say he can pay cash for it or take out a mortgage and put 20% down
if he takes out a mortgage at 4% then he can put his cash in other investments
so what does he do? get a mortgage and try to find returns better than 4% to make up for the interest payments?
or pay cash for the house? either way this guy still has investments, but just less of it if buying the house with cash
Depends on goals, stage of life, and how comfortable the person is with risk.
If the goal is maximum net worth, they will invest the cash in a place that returns better than 4%, and they're not planning to retire anytime soon I would take out the mortgage with just enough of a down payment to get out of PMI.
Originally Posted by .Grimace
For a 300k house your pay $172,000 in interest that's insane to me! Add $500/ month extra to each payment or get real crazy and split them up to make bi-monthly payments depending on how you get paid and you can cut that total interest paid by like 100k.
It seems like a big number because of the length of time. 300k 30 years ago is 623k today just from adjusting for inflation and the S&P 500 has returned 1684% over that same 30 year period.
I assume the bank does not know the loan is being used for a down payment? With CA housing prices a DP + rehab loan is pretty darn big - wait, was that 4% the loan APR or the DP amount? I suppose if you have equity elsewhere, good income and good credit they don't care so much what you're doing with the money? Maybe I should look into this, fiancé and I have been wondering how we can find some kinda new revenue stream.
The houses Im doing are in a much cheaper market and I'm only paying interest on the line of credit for at most 6 months. The project I'm about to start should only take 6 weeks.
04-09-2019, 11:48 AM
Re: The Official Formula 1 2019 Season Thread
