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Situation: late 20s, 2 young kids, single income household gross 150-170k a year. Have 1 paid off $280k rental house that brings 1k a month profit, current house worth 300k with 100k left on mortgage, would make a great rental and cash flow, appropriately $400 a month profit depending on repairs.
High earning spouse wants to buy a $400k house in nice suburb to live in for the next 10 years or so, at least as a home base, and flip the current one into a rental.
A basement and larger yard for growing kids would be nice but not necessary, could live here longer happily, but spouse prefers to move for various reasons.
Local market hot and only going up especially with big housing shortage, since we want to be in this area long term probably makes sense to buy sooner rather than later.
Problem is, so much $ tied up in equity, we don’t have a down payment.
With some belt tightening can definitely sustain the $3k mortgage, but the initial $70- 90k for 20% down, closing costs, moving costs etc is a big barrier.
The following funding is on the table:
– cash out refinance current house at 1% higher rate plus closing costs and hassle
– cash out loan from 1st rental ( not wise mixing personal and business funds)
– HELOC at 7.75% interest rate for whole amount, 15 years to pay back
– pull from vanguard index fund, $100k available. Hate to pull out in this market.
– could ask family member for loan and probably get full amount at 0 or 5% interest, but mixing family and money is
Currently have $8k set aside growing in special house buying account that earns 7% interest, have to use within 4 years. $25k emergency fund/liquid.Not willing to loan against or touch Roth IRAs or 401k
What are your suggestions?