Posted by James Strange on May 18, 2003 at 16:55:15:
It sounds like a sound plan to me. Just keep the LTV ratios low. And make sure that the rent will show a positive cash flow over the payment.
If You Were Me What Would You Do - Posted by Bill
Posted by Bill on May 18, 2003 at 10:59:28:
My wife and I are wanting to move. Currently, our house is paid off and is estimated to be worth approximately 190K. The house we want to buy is worth approximately 230K. We are thinking we want to structure the loan to take money out of our current home and apply it to the new home. Next we want to lease the current home to capture a cash flow income and take advantage of depreciation. Is this the right way to proceed?
Re: If You Were Me What Would You Do - Posted by Pamela Wall
Posted by Pamela Wall on May 20, 2003 at 17:53:49:
Yes, you are on the right track. You will be getting monthly income from your old property and gaining another asset with your new house. I actually recommend pushing the LTV as much as you can given today’s low interest rates. If there’s excess cash, put it in the bank/investment account/etc. for a reserve versus keeping the extra cash in the house. I did this same thing for my mother, and she being old school conservative, did not want a high LTV loan. After closing the loan and realizing how she could have made the extra funds work for her, she was disappointed not to have taken more money against her house.