Buying House, when you have a house... what to do with extra $$$

Quote from MrTickle : I think what i meant to imply was, I will put my house on the market at the same time as looking, probably a month or so before I really start looking. I just don't want to be forced into a home, because we just sold ours. I have never heard of the rent-back, not a bad idea, but I was hoping to go into both contracts, selling/buying, with little strings attached, so i can get max money and pay less money. I think I might just split the difference, put 200-300 against my house, and 200-300 in a savings (easy to get out). Maybe even open an equity line, and if the first house doesn't sell as i buy the 2nd, borrow against that for a month or so. so many things to think about, and my wife gets a clear head thinking about none of it... rainbows and butterflies I say

there are apartments that specialize in renting to prospective home buyers. So you could stay in one of those after your house sells and before you move in.

Quote from bonkman : there are apartments that specialize in renting to prospective home buyers. So you could stay in one of those after your house sells and before you move in.

Wouldn't it be a pain to have to move your stuff twice? I don't think I could fit my whole house in a POD. To tell you the truth, I have parents that live in a house that 3x to big for them (20 miles up the road from me), and they would have no issue with my family living there for a few months... but had no idea what I should do with my stuff. Kind of a toss up of what convenience is worth to me

Quote from MrTickle : Wouldn't it be a pain to have to move your stuff twice? I don't think I could fit my whole house in a POD. To tell you the truth, I have parents that live in a house that 3x to big for them (20 miles up the road from me), and they would have no issue with my family living there for a few months... but had no idea what I should do with my stuff. Kind of a toss up of what convenience is worth to me

My wife and I found that it was far cheaper to rent a 26' UHAUL for the week we moved rather than have a POD. Stuffed all of our stuff in there.

Thats a good option to think about... And it makes sure the house is for sure sold... Thanks..

I know this is some time out, but this kind of stuff takes planning

Quote from MrTickle : Thats a good option to think about... And it makes sure the house is for sure sold... Thanks.. I know this is some time out, but this kind of stuff takes planning

Im in the same situation as you. I'd like to move in the near future ~1 year. Selling then moving in with a realitive while buying the new house seems like the best option. When my parents moved into their 2nd house we did this while the new house was being finished built/added on/finished. Works out in the end. Probably easier dumping the big furniture things in a storage locker if it will be a few months.

Quote from MrTickle : Thats a good option to think about... And it makes sure the house is for sure sold... Thanks.. I know this is some time out, but this kind of stuff takes planning

I recently bought and sold (actually had the closings same day, a few hours apart). And we actually accepted an offer and had our offer accepted within a day of each other. So we got lucky with the timings. However, the bit of advice I'll give you is to have your house ready to be put on the market ASAP. Not that you need to have it on the market, but that it should be market-ready. Fix anything that's broken or ugly, touch up the paint, get rid of extra crap, stage the furniture, etc, etc. If you have the place ready to go and in a state where it looks like an awesome house, when something pops up on the market that you're interested in purchasing, you can put it on the market immediately. If you price it right and if the real-estate market around you is doing okay, you should be able to sell it pretty quickly and make your purchase worry-free. If you procrastinate on getting your house prepped, it'll be a hell of a process and you may not be able to sell quickly (or at a price that you desire).

Quote from nizzy1115 : Im in the same situation as you. I'd like to move in the near future ~1 year. Selling then moving in with a realitive while buying the new house seems like the best option. When my parents moved into their 2nd house we did this while the new house was being finished built/added on/finished. Works out in the end. Probably easier dumping the big furniture things in a storage locker if it will be a few months.

Depends who your relatives are

Quote from MrTickle : I don't know much about ETF's, and what little I know about Bonds are they grow slow, little risk. I have a ROTH and my 401K maxed to my employee max, again with little thought to it, other than I am 'high risk/high reward" I trust that whatever I lost, I could make up in 3 years, and my wife is blind to what I acctually do with the $$, but she can multiply 36 months by 400$ and get that the number needs to be that amount or more lol ETF like a mutual fund? where there is a guy stealing 1-2% of my money every month :ROFL: or something different? I have TD Ameritrade right now, and Fidelity with my ROTH and 401K I do agree 100% with you heavylee, that I need closing cost ect... in the last 6 months, so i guess whatever i do i need to pull it with a few months left

You should do some research It's clear that you have a perverse understanding of financial markets and volatility.

Quote from PiratesSayARRR : You should do some research It's clear that you have a perverse understanding of financial markets and volatility.

I think the real issue is that he's investing with someone that's taking 1-2% of his money, and he has no idea how it's really being invested.

My advice (both for this specific housing question and general investing) is that if you're not planning on using the money for at least a year, then invest in index funds. Vanguard index funds have very low costs (under .5%, I think somewhere around .15-.25%). If you look at almost any 3 year period, you end up making money. Even if after 3 or 4 years the fund was at the same as when you bought it, you'll end up still making money on just the dividends.

Not only are you very unlikely to lose money over 3-4 years of consistent investing in an index fund (as in, don't try to time the market, just put in your $400 each month and forget about it), you're looking at an average return over 5% (some will say it's 8 or 9%, some will say it's 6% after taxes). You could also end up making 10% or more if you're lucky. I think that for the small risk that you would be taking looking at a 3-4 year timeframe, it's more than worth the possibility of increasing your money by significantly more than the 1-2% you'll find in any safer type of investment.

So what is an index fund? Basically a group of stocks chosen to 'track the market'.. the goal is to try to diversify the stocks chosen for the fund such that the performance of the fund is very similar to the performance of the market it tracks (such as the S&P500, international markets, etc).

Yes, there's a chance of losing money. It's small, and the amount you would lose would probably also be small. But for the amount of gain you could be looking at, definitely worth the risk.

Also, tell your financial manager to go suck it (figuratively speaking). Invest in an index fund (they do better on average than 'actively managed' funds, with lower fees. So you make more money, and you keep much more of what you make.

You could also split it up, and put some money into a safer account (savings or CD, whatever you can find better rates for), and the rest into a better investment. Less risk, but much less reward.

Hope that helps .

Quote from DWad : I think the real issue is that he's investing with someone that's taking 1-2% of his money, and he has no idea how it's really being invested. My advice (both for this specific housing question and general investing) is that if you're not planning on using the money for at least a year, then invest in index funds. Vanguard index funds have very low costs (under .5%, I think somewhere around .15-.25%). If you look at almost any 3 year period, you end up making money. Even if after 3 or 4 years the fund was at the same as when you bought it, you'll end up still making money on just the dividends. Not only are you very unlikely to lose money over 3-4 years of consistent investing in an index fund (as in, don't try to time the market, just put in your $400 each month and forget about it), you're looking at an average return over 5% (some will say it's 8 or 9%, some will say it's 6% after taxes). You could also end up making 10% or more if you're lucky. I think that for the small risk that you would be taking looking at a 3-4 year timeframe, it's more than worth the possibility of increasing your money by significantly more than the 1-2% you'll find in any safer type of investment. So what is an index fund? Basically a group of stocks chosen to 'track the market'.. the goal is to try to diversify the stocks chosen for the fund such that the performance of the fund is very similar to the performance of the market it tracks (such as the S&P500, international markets, etc). Yes, there's a chance of losing money. It's small, and the amount you would lose would probably also be small. But for the amount of gain you could be looking at, definitely worth the risk. Also, tell your financial manager to go suck it (figuratively speaking). Invest in an index fund (they do better on average than 'actively managed' funds, with lower fees. So you make more money, and you keep much more of what you make. You could also split it up, and put some money into a safer account (savings or CD, whatever you can find better rates for), and the rest into a better investment. Less risk, but much less reward. Hope that helps .

Well I don't know of any ETF manager raking in 1-2% per MONTH in fees

I would recomend putting as little money as possible into your current home. The cash will be more important to have in hand if you decide to try and buy before you sell.

With the way the market is right now (unpredictable) and what we've seen happen my theory on home loans is to put down 20% up front to avoid PMI and make your minimum payments over 30 years. Reasons being:
A) There is risk that your house could be worth less than you paid for it at any time, there is also risk that you and your spouse could both lose your jobs and not be able to make your payments, if this happens everything you put into your house is gone. If you save the additional cash you will have it. Now I'm NOT advocating to lever up as high as possible but I wouldn't be in a hurry to pay down a home loan.
B) Interest rates are so low right now you should take advantage of that and the fact that it is the only tax deductable loan you're going to get. Save your money to avoid taking out car loans in the future, or in your case a future down payment on a new house.