We're considering a "cost-neutral" move (except for the usual obscene closing costs) to a different neighborhood in our city. At 2500 sq ft, our current home is under-utilized. We want to downsize, have better walkability and get into a great school district. We're in a relatively HCOL city with two jobs that are uniquely tied to this area. We also have family here, and we like where we live. Our current home would probably go for around $440k and we owe about $275k. I want to be able to throw whatever equity we're taking out of our home sale and apply it fully to the new home.
The kicker is that we have virtually no cash, except for about $3k in a savings account (I also have around $50k+ in eBay inventory from my side gig at home that can be turned into $1K fairly quickly here and there , so having a small amount in savings doesn't keep me up at night). We have a HELOC in place as an emergency fund. Most of our savings is in Vanguard IRAs and a smaller amount is in our current 401ks.
These are the options that I'm aware of:
• Bridge Loan -- seems sketchy, sketchy lenders, higher interest and in some cases penalty for early payoff!
• HELOC -- could work for part of it, but not the $100k that we'd need
• 401k loan -- assuming that one is disciplined and pays it back as SOON as the money from the sale hits the bank account, this one seems OK.
• IRA loan -- is there such a thing? We have Vanguard accounts. Need to research
• Loan from parents -- this is a possibility. Parents have the money, but you know, borrowing for family even short term kind of sucks. I think that the money needs to be in your account for a certain period of time also?
• Sell first, then buy. Yes, a possibility but inventory is extremely limited where we are. Even finding a suitable rental for the interim would be a challenge. And moving twice? Yuck. Our market is super hot. Contingencies are pretty rare here, especially with all the cash buyers.
Am I missing anything? What's the best method for getting this done? Thanks!
