Author Topic: New House, no mortgage, what to do?  (Read 306 times)

joenorm

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New House, no mortgage, what to do?
« on: October 23, 2020, 08:12:32 AM »
I have spent the last year or so building a home from scratch, mainly by myself and hiring out things I could not do. I funded it with proceeds from my last primary residence sale. I am almost ready for a final inspection, at that point I will have a home that might sell in the current market for $650-$700K.
I will have no mortgage on the house at all.

I'd like to take out a mortgage when I can, in order to purchase more property. The market in my area is insanely high, would seem crazy to buy anything right now.

Wondering what others might suggest to someone in my position? Borrowing is cheap right now so it seems like I should take advantage of the opportunity, I'm just not really sure how when the market is so bubbled.

Thanks

srad

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Re: New House, no mortgage, what to do?
« Reply #1 on: October 23, 2020, 10:38:52 AM »
My advise, you need to take out a loan as soon as you are eligible to.  With the rates where they are, you don't want to miss them.  How much is entirely up to you, but I'd at least take out what you put in to build the place. 

If you are looking to expand, having the money ready and available makes it that much easier to act when/if a deal pops up.  You don't want an off market deal to present itself and then have to deal with getting financing from your place to finance the new place.  Being able to say i have XX to put down (or pay it in cash, to refi later), makes your offer strong.

srad

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Re: New House, no mortgage, what to do?
« Reply #2 on: October 23, 2020, 10:55:53 AM »
Actually, i have another thought.  Instead of taking out a mortgage and parking the money, go get as big of line of credit you can on the house.  That way you aren't paying mortgage interest on money just sitting there, but you do have access to it when needed.  Mortgage rates don't appear to be going up anytime too soon, but when they do start to show signs of moving up, you can refinance then.