Up to what % of nest egg portfolio makes sense to sell off to use as a 20% down payment in Bay Area? For example if portfolio is $1M would it make sense to sell $200K to use as down payment on $1M house? How about selling $400K of $1M (40%) for a 20% down payment on a $2M house? Cash out the entire portfolio as down payment?
Determine how much mtg you want to pay.
And how much tax you’ll pay on the equities you liquidate
Don't touch retirement funds. Preferably liquidate poorly performing stocks so you can avoid capital gains tax.
Remember selling stocks will generate taxes, for that amount you'll need to keep around 40% of what you get for the IRS
If your fund is 1m and you don't go on margin, consider going on margin of up to 30% and use it as down payment. This way you don't realize cap gains.
Depends on your comfort level.
I was in a similar spot a couple years ago. My financial advisor advised an interest only loan and leverage my wife and my assets to put nothing down. With interest only loans anything you pay on top of the mortgage goes straight to principal, and we have $300k set aside in a mortgages pledged holding account that we can’t touch but is still invested and making money. My advice is to find a financial advisor and see what your options are. You don’t need to liquidate to buy a house.
You don’t need 20% down...
Don't take out the entire thing. That's obvious. Stocks are volatile. What I would do in this case is cash out ~50% and use that for down, closing, furniture etc. If the stocks go up be happy that you took only 50% out. If the stocks go down be happy that you took at least 50% out.
If the stocks go up, I will whine for selling 50% early. If the stocks go down, will feel bad for not selling all.
Haha thats true. I used this strategy with Bitcoin and didn't feel bad at all. ¯\_(ツ)_/¯