Posts tagged Buying A Home
How much of my house-sale proceeds should I use for purchasing a new home?
How much of my house-sale proceeds should I use for purchasing a new home?

How much to use will depend on the rest of your financial situation, including your monthly income, the size of your emergency fund, whether you are on track for retirement savings, and even the terms of the divorce. While it is important you get a place of your own, take your time with this decision. You don’t want your excitement over buying a new home to overshadow your rational analysis and decision-making.

Also Covered:

  • Impacts on monthly cash flow are key

  • Don’t overspend, especially in this market

  • Don’t unravel the fairness of the divorce settlement with the home purchase

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Life Planning, Investing, Retirement PlanningJoshua Escalante Troesh, CFPBuying A Home, Divorce, Retirement Planning, Emergency Fund, Selling a Home
As a university student who only works part-time, how much work history do I need in order to be eligible for a mortgage to purchase a rental property?
As a university student who only works part-time, how much work history do I need in order to be eligible for a mortgage to purchase a rental property?

I applaud you for beginning the process of building a property portfolio while you are in college. Generally speaking, you will not be able to get a mortgage without a steady history of income that is both stable and sufficient to pay the mortgage. With a 50% down payment, it is possible to get an asset-based loan, which will be approved primarily based upon the equity in the home, even without a steady personal income. Based on the numbers you have provided, however, I would not recommend going that route.

  • Investment real estate requires more cash than just the downpayment

  • There are safer and easier real estate investment alternatives

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Life PlanningJoshua Escalante Troesh, CFPBuying A Home
How will I be taxed on the money from the sale of my house?
How will I be taxed on the money from the sale of my house?

There is a good chance you will pay 0% in taxes on the sale of your home. The tax code has a provision for the sale of your primary residence where you can shield profit from taxation, called the primary residence exclusion. If you have been living in the house for at least the past two years, you can qualify to avoid taxation on the profit from your home, up to a total of $250,000 if you are single or $500,000 if you are married.

  • You may not be able to avoid all taxes

  • You only pay taxes on profit

  • You may owe no taxes

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Tax PlanningJoshua Escalante Troesh, CFPTax Planning, Mortgage, Buying A Home, Capital Gains Taxes, Property Tax
I am saving for a down payment for a house; should I keep the money in my savings account or move it somewhere different?
I am saving for a down payment for a house; should I keep the money in my savings account or move it somewhere different?

Considering you have a 3-year timeline, a standard savings account isn't optimal due to the low interest rates being unlikely to keep up with inflation. A money market savings account or certificate of deposit would be a better to consider. If you are comfortable with taking on more risk . . . .

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Life Planning, InvestingJoshua Escalante Troesh, CFPBuying A Home, Ginny Mae Fund, Treasury Bond Fund, Investment portfolio, Money Market Funds, Money Market Accounts, Savings, Certificates of Deposit (CDs)
Should my wife and I deplete our cash reserves, withdraw from my 401(k), or use a HELOC to finance home improvements?
Should my wife and I deplete our cash reserves, withdraw from my 401(k), or use a HELOC to finance home improvements?

I would be hesitant to pay for the home improvement either through withdrawing from a retirement account or getting a HELOC. Both options will increase your risk and harm your ability to enjoy a comfortable retirement over the long-term. There are other recommendations you should . . . .

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Life Planning, Retirement PlanningJoshua Escalante Troesh, CFPRetirement & Legacy, Retirement Planning, Buying A Home, Managing Wealth, HELOC, 401(k), 30-year mortgage, 15-year mortgage, Social Security
What is the safest way to earn a higher interest rate on our money than by using our traditional savings account or a money market account?
What is the safest way to earn a higher interest rate on our money than by using our traditional savings account or a money market account?

In order to stay within your "safest" criteria, you would want to stick with an FDIC or NCUA insured account. You can get slightly higher interest rates by shopping around for high-interest savings accounts from online banks and credit unions. Currently (November 2018), rates on savings accounts are….

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Life Planning, InvestingJoshua Escalante Troesh, CFPStarting Out, Financial Foundation, Building Wealth, Young Families, Buying A Home, Savings, Certificates of Deposit (CDs), Money Market Funds, Money Market Accounts, High-Yield Savings Accounts