Downpayment funds sourcing

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Mar 8, 2020 7 Comments

Have signed a purchase agreement on a single family home and have to make a 200K downpayment at closing in a month.

All of my savings are in company stocks, 401K and wealthfront. A bit of cash is lying around on savings account (50K).

Im wondering whats the best thing to do for making the downpayment is. Should I sell FB stocks or liquidate some of my weakthfront investment account or take a loan against 401K. Another option is to take a portfolio line of credit up to 100K from wealthfront at 4.6%.

With the corona virus scare and markets being down and will likely go down in next few months, is it advisable to sell stocks now? or is it better to take line of credit agianst my investment portfolio or against my 401K.#seattle

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TOP 7 Comments
  • Google / Project
    kXgR05

    Go to company page Google Project

    kXgR05
    Not sure how many people follow this advice, but the down payment should have been in cash (or equivalent) before you started looking seriously for real estate.

    Presumably, people have a budget. If you need more, then they might liquidate stock or use other sources.

    Do people still do this?
    Mar 8, 2020 0
  • SAP
    d_$_dude

    Go to company page SAP

    d_$_dude
    If you have a big purchase like home coming up in 1-1.5 years, you should always have the down payment cashed out from stocks and sitting in a high interest yield savings account like Ally, etc. I am not an expert on home purchases but I would believe your best bet would be just do the min down payment say 5% and pay PMI for next 6-12 months. With interest rate cuts and another rate cut later this month by Fed, you can easily refinance later in Nov,Dec timeline. I think the interest rates will go lower closer to 0% and will stay that way this year as the Fed will try to urge US economy to boost by Quantitative Easying :)
    Mar 9, 2020 1
    • Apple
      glasceilin

      Go to company page Apple

      glasceilin
      This is my plan. The PMI is what makes my monthly mortgage seem way to high. Hoping to get equity enough to boost me over the 20% sooner than later with 5% down
      Mar 9, 2020
  • Facebook
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    OP
    Seems like I can do 10% down instead of 20% down and that will increase the apr by 0.25% which adds another 500$ per month. My lender doesn’t have PMI for jumbo loans and the rate increase will be forever. Is that a good option instead of liquidating stocks at the current market ?
    Mar 9, 2020 1
    • SAP
      d_$_dude

      Go to company page SAP

      d_$_dude
      Is the lender Quicken Loans ? They offer no PMI loans. Rate increase forever ? You are getting a 30 yr fixed conventional loan I suppose. You can refinance always later point.
      Mar 9, 2020
  • Facebook
    CaHotsauce

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    CaHotsauce
    Selling fb stock has blackout dates....
    Mar 9, 2020 0
  • I think almost all asset classes are going to fall in 2020 as the world economy contracts. I would stay well diversified and tighten the seatbelt for a volatile ride.
    Mar 8, 2020 0