jervalaw wrote:Bought townhouse secured by home equity line for $450,000 at 2.2% good for one year then variable. Sold old house and netted about $500,000.00 (basis was $330,000). Also bought beachcondo and have 30 year mortagage at 3.89% with a principal of $550,000.00. My original intent was to pay off home equity line due to the rate only being good for one year. Currently, I am paying about $1,000 in tax deductible interest on the home equity line and $3,300 in mainly tax deductible interest on the condo beach mortgate.
So, should one pay off either one of these with the proceeds?
I guess one could invest the $500,000 and hope to do better than whatever the interest rate turns out to be on the home equity line.
My wife and I both work. Combined income of $200,000.00 with about 2.5 million in retirement savings and $500,000 in other savings. I am 64 and my wife is 58. I intend to retire in 5 years and my wife in 7 years.
Let me summarize what I understand.
1. Owned a $X house that "netted" about $500K (basis $330K) - that doesn't say anything about previous debt (if you had some).
2. Bought a $Y townhouse and owe $450K line of credit, variable interest after 1 year.
3. Bought a $Z beach condo and owe $550K, 30 years, 3.89%.
4. Savings (investments) of $3 Million.
Presumably, using other funds for down payment
, you bought 2 properties (#2, #3) and have $500K net proceeds from previous home equity.
- Is this right ?
- Is current $1M in debt comparable to previously ?