"SizzleMP" <sizzlemp[at]aol.com> wrote in message
news:20040508095222.22456.00000107[at]mb-m29.aol.com...
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In addition to the other responses you may also want to consider some
taxation issues here as well. Bare in mind that your mortgage interest
deduction will most likely be jumping up from its current level for several
years. You may also want to consider other fixed income securities that are
exempt from federal and or state taxation if your current tax bracket is
high enough to warrant it.

Congratulations on the new house!

-JSR

sizzlemp[at]aol.com (SizzleMP) wrote in message news:<20040508095222.22456.00000107[at]mb-m29.aol.com> ...
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I would consider a 15 year mortgage and lower the interest rate even
more.
I would keep 1 year's mortgage payments in cash (if it is not paid off
from proceeds). This is because in the event of job loss you would
not lose your home. Laddering 12 month CD's is one way to invest this
money.

I would make sure I had enough insurance to cover lost income.

I would make sure I had a retirment, education and investment plan.

If all plans are already in effect I would make sure they are funded
properly and start considering diversifying into other investments
(real estate, small businesses) or take a vacation.

"SizzleMP" <sizzlemp[at]aol.com> wrote in message
news:20040508095222.22456.00000107[at]mb-m29.aol.com...
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What would you do with the $2054/mo if you chose option A? Would you invest
it? How, and what would be the expected return? These are a couple of the
questions I would ask of myself before making a decision.

Elizabeth Richardson

I posted here a couple of months ago asking advice about purchasing my new
house and selling my own house. Now that I am a month from my closing and more
things are set in stone I would like to ask more advice. Here is my scenario:

I am purchasing a house for $494,000, putting $160K down, so I can get the max
for a convetional 30 year loan (333,700) [at]6.25% ($2054/mo). I will have
$30,000 left after closing in mid-June.
A month later in mid-July, I will close on selling my house for $435,000. After
paying off the bank I will net $345,000 after closing.

So after the smoke clears, I will have a 30 year mtg ($333,700) [at]6.25%
($2054/mo) with $375,000 in the bank.

I have a lot of options at this point. I can either:
A) Pay off the mtg and be left with $42,000 in the bank.
B) Pay down about $150,000 towards the mtg, which would shorten the mtg to
just 10 years and saving a lot in interest.
C) Keep the mtg, invest the $375,000 in the bank wisely. If interest rates for
CD's and money markets go up in a few years, it would do better than the
6.25% mtg.

I think 6.25% is a pretty good rate and might opt for option C. I was just
wondering what everyone else might do.