Offer accepted for 1.3M. 3700 sq ft liveable and 1.3 acre garden / yard. MCOL Have around 2.2M net worth with the following stocks: AAPL - 615k (some of these are 300-400% gains and I haven’t sold) META - 270k (+100% gain) QQQ / VOO - 1.2M HYSA - 200k I don’t have any losses. Should I sell META and AAPL and pay 30% downpayment? I foresee working at Apple for the next 2 years. Household TC - 615k
How y’all get these numbers is beyond me! And how come everyone is so stupid. Sell all Apple and Meta and put down as down payment. Reduce your monthly payments and keep the emergency fund of 200k. It’s really not that hard.
If interest rates go down and I can refinance at 5% interest rate and Apple stock and meta stock potentially have a higher growth rate than that, why wouldn’t I want to go for that option? Of course, I would want to de-risk it which is why I’m confused.
Also I’ll be significantly paying taxes if I sell META and AAPL.
Increase down payment only if it makes the monthly payment more manageable, or if there is some kind of benefit you can extract. With most mortgages, you can pay off arbitrary parts of the principal at any time. Hence, could put 20% down and pay another 10% a couple of days after origination. That may provide a bit more breathing room/time to liquidate assets.
Why would you ever put more than the 20% needed? Is your bank somehow requiring 30% to get something?
To lower my monthly payments. Also interest rate is 7%.
You can probably buy points, 3% (39k) points might knock it down to 5% which if you don’t plan on refinancing might pay itself off in interest savings. I had a big spreadsheet of points vs interest, and targeted a payback ratio of 3 years on the points in case I did sell etc.
You are locking up more money that you can’t touch, there is a huge opportunity cost in losing that money. That money could be appreciating in an index fund.
I’m not going to sell my index funds: VOO, QQQ. Only looking to sell my META stock since I’ve already made 100% in gains and now seems like the good time to sell. But I will owe the tax on the sale if I do.
yes but you could have that money reinvested elsewhere.
Yeah its just 20% federal tax, + 3% federal tax, + state tax if any. I would donate some of the shares or SOMETHING to a donor advised fund for an up to 30% tax deduction. But do you own anything illiquid, like art? I would donate ILLIQUID appreciated assets over shares that I could actually turn to cash and feel like I’m missing. In your shoes I would probably put all $200k into the downpayment. and the other $200k from these stocks
California adds another 10%
Isn’t donating just a 100% loss instead of a 30% loss?
Not much to debate since your options are either 20 or 30%. If it’s between 20% or 40% or more, at least then it makes sense to debate for lower monthly payments. Not sure how much you could lower your monthly payment by paying 20% Vs 30% since your net worth more than the house cost so the difference in monthly payment that you are considering., I believe shouldn’t matter to you
Look into securities based line of credit.. allows you to let your stock group while building short term liquidity
Leveraged credit line interest is higher and pretty high risk vs. mortgage. Also mortgage interest has tax benefits.
Worth it if I can keep stocks bound to go up. Can apply interest towards tax , but agree it’s higher than mortgage. But also no need to refinance once rates go down
I would buy cash if I were you.
If I were you I'd sell some AAPL enough to cover 20% or whatever makes the mortgage manageable as you are overexposed through employment. Refinance once rates go down
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sure but prepare for the big tax bill you will generate
That will be the case whenever they sell.
Prob 15% as they are likely long term capital gains.