Sell Berkshire stock for Downpayment on House?

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JustGotScammed
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Sell Berkshire stock for Downpayment on House?

Post by JustGotScammed »

What's better: Selling Berkshire Hathaway stock to make 20% down payment on house, or keep Berkshire stock and borrow nearly 96.5% of purchase price? A decision I am evaluating.
WonderWander
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Re: Sell Berkshire stock for Downpayment on House?

Post by WonderWander »

Hard to say without knowing more details.

You will have to pay taxes on any gains on the BRK stock you sell. How much capital gains will you incur?

Borrowing more will cost you additional interest payments. What the interest rate?

You can do a quick comparison with these details and see where you come out ahead.
stan1
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Re: Sell Berkshire stock for Downpayment on House?

Post by stan1 »

You'd have to do the spreadsheet with your specific information, but there's a decent chance that over 20 or 30 years it won't make much of a difference, and if it does it will come down to what assumptions you make in the spreadsheet such as when you sell the house, what the sales price is, what the returns of BRK are, what future tax rates are, and so forth.

Also, you can do some of both. It doesn't have to be either 20% down or 3.5% down.

Do you have any other ways to get liquidity? HELOC, margin loan, 401K loan?
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Toons
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Re: Sell Berkshire stock for Downpayment on House?

Post by Toons »

Pay Cash :happy
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arcticpineapplecorp.
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Re: Sell Berkshire stock for Downpayment on House?

Post by arcticpineapplecorp. »

whatever you do, don't sell it when it's only $185 a share
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Valuethinker
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Re: Sell Berkshire stock for Downpayment on House?

Post by Valuethinker »

JustGotScammed wrote: Sun Jun 09, 2024 5:26 pm What's better: Selling Berkshire Hathaway stock to make 20% down payment on house, or keep Berkshire stock and borrow nearly 96.5% of purchase price? A decision I am evaluating.
Is there a significant difference in cost of mortgage above or below 20% mark?

If so, you could view that as the crossover point.
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JustGotScammed
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Re: Sell Berkshire stock for Downpayment on House?

Post by JustGotScammed »

Are there places where you can put 0% down without paying more than putting 20% down?
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arcticpineapplecorp.
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Re: Sell Berkshire stock for Downpayment on House?

Post by arcticpineapplecorp. »

JustGotScammed wrote: Mon Jun 10, 2024 1:05 pm Are there places where you can put 0% down without paying more than putting 20% down?
first time homebuyer's program can sometimes be as little as 3% down and NO PMI (I had one in 1996). Don't know if they still exist.
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TravelforFun
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Re: Sell Berkshire stock for Downpayment on House?

Post by TravelforFun »

JustGotScammed wrote: Sun Jun 09, 2024 5:26 pm What's better: Selling Berkshire Hathaway stock to make 20% down payment on house, or keep Berkshire stock and borrow nearly 96.5% of purchase price? A decision I am evaluating.
I assume you want to put down 20% to avoid paying the PMI by selling the stock. Many factors like PMI savings, interest costs, interest deductions, potential stock gains and taxes associated with these gains, etc. can impact the decision to sell vs not to sell, and a spreadsheet can help you decide.

TravelforFun
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JustGotScammed
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Re: Sell Berkshire stock for Downpayment on House?

Post by JustGotScammed »

Where is the best place to get the lowest mortgage rate
bikesandbeers
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Re: Sell Berkshire stock for Downpayment on House?

Post by bikesandbeers »

One of the online lenders will generally give you a better rate than a national bank.
AIMloan is good about giving you a rate without having to sign up for a bunch of stuff.

I sold a bunch of BrK.b for my 20% down payment with 20-20 hindsight, I could have locked in a bigger loans when rates were 3% and kept more BRK.
bombcar
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Re: Sell Berkshire stock for Downpayment on House?

Post by bombcar »

I’m going to imagine you’re selling a share of BRK.a to get a 20% down payment - meaning a purchase price of 3 million.
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