Answers in Real Estate

Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit. Should I refinance now or later? Should I invest in real estate backed securities? Read on for popular real estate questions.
4 votes
Cyril, I think your questions has a short term and a long term answer. Short term it would be better to save and buy the house, long term with the power of compounding you would be better off saving for retirement. I think James is right sitting down ...(more)
2 votes
This depends to some extent on your circumstances. If you can buy a house that you will be comfortable in for a long time (at least 5 years), then it is beneficial in my view to get that ball started sooner rather than later. Plan to buy enough to be ...(more)
1 vote
John Essigman Level 17
Hi Cyril, Agree with Peter but only to a point. Having savings and investment dollars both inside and outside of a qualified (401, IRA, etc) will provide some flexibility. Certainly continue to max out your 401(k) match but don’t do more than that as ...(more)
1 vote
Peter Cacioppo Level 16
Put maximum into the 401k since you will then pay less income tax. Then save for a house if; A.,you are buying in an area that should show increases in value over the next 10 years, and B.,you will be in a house for at least 3 years. Consider getting ...(more)
0 votes
In the most simple terms, you are paying $3200 in points in exchange for $800 less interest per year (although this savings will drop each year as the principle balance of your mortgage drops). I am assuming 5.50% vs. 5.00% on $160,000 ($200,000 less ...(more)
2 votes
John Essigman Level 17
Hi Ariana, Your question is not clear… How much would you save as compared to what? Are you saying that your mortgage is being offered at 7.5% and you can buy that down to 5.5%? Or are you saying you can buy it down from 5.5 to 5%? At what cost… ...(more)
0 votes
Tunc Tanin Level 10
While Kiplinger and Money magazine's used to say that it is a good idea to shorten your mortgage, then the rates were much higher. Also you may be able to afford it now,, but can you afford the extra payment in the future. One problem with paying off ...(more)
1 vote
Like everyone else, I'd discourage you from borrowing against your 401(k) to buy a house, since doing so will set you behind in your retirement savings. Plus, there's always the risk you'll get laid off, at which point you either need to pay back the ...(more)
1 vote
Tunc Tanin Level 10
The biggest risk with 401k loans is that if you loose your job the next day, you may have to pay back the amount in full sometimes within 30 days. Another issue to consider is that if you die the loan may have to be paid back right away, otherwise it ...(more)
1 vote
Not a big fan of this at all. Not only for the reasons mentioned above but you also lose the compounding interest of that money which defeats the purpose of having a 401(k). I would wait on the home purchase if this is the only way you are going to ...(more)
1 vote
Urban C Fleming Level 8
Elgin, You can borrow the smaller of your vested share or up to 50,000. They will charge you interest on what you borrow (ask your HR department what the rate is). The term for a home purchase may be around 15 years. The risk you take when borrowing from ...(more)
2 votes
I'm generally not in favor of 401(k) loans. Remember, the money in your 401(k) is pre-tax and you will be repaying the loan in post tax dollars. Basically, the money you use to pay back the loan (and interest) will be taxed twice. Also, if you leave ...(more)
0 votes
I am not a fan of the bi-weekly mortgage programs offered by banks. You can, as others have indicated, create the same payoff schedule by simply sending extra principal payments with your mortgage payment each month. That is, if your goal is to pay your ...(more)
0 votes
Tina, I have had a few clients do what you are thinking about doing over the years and it has never worked out as they expected. Borrowing from your 401k should be an "emergency only" action. Unfortunately, once money goes into a 401k, you lose a great ...(more)
0 votes
This is a really bad idea for the reasons others have given. Let me add another reason: real estate is not a liquid investment and you have very little in emergency money. If it does not rent immediately, or the renters fail to pay on time, you could ...(more)
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