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Mr Stubs

Mr Stubs

Taste my rainbow, bitches
Joined
May 19, 2020
Member Number
101
Messages
2,032
Loc
Land of liquid sunshine
I’m thinking of refinancing my house and pulling out a bunch of equity for a future purchase.

You guys with experience with this or selling your home, etc, what do you do with the large sum of money while it’s waiting to be used?

Bank account? Interest bearing investments? Mattress?
 
I am NOT a money guy, but...


The money is already being tracked, so leave it in the bank until the purchase. Unless of course it will be a cash deal.
 
You are gonna buy stuff for the forty with it right? You need it to be liquid then. Don’t put it where you can’t pull it out quick when you need it. You’re not gonna make anything on it as far as interest because every savings, etc account goes. The rate is damn near zero.
 
If you pull equity you're paying interest on the loan even if you don't use it. What's the interest rate on a checking or savings account? What's your HELOC interest rate?
 
Pony_Driver said:
If you pull equity you're paying interest on the loan even if you don't use it. What's the interest rate on a checking or savings account? What's your HELOC interest rate?
Click to expand...
The rate on my checking, savings, and money market accounts are pathetic, like .01%.

Now I do have a TOD account that was earning about 10-12% but now it’s back up to 5% (end of the world shit, ya know🙄)

So theoretically I could have that money making close to what I would be paying in interest. But that also means it’s subjected to market swings.
 
We have an election coming up. POTUS getting a second term bodes very well for the market.
 
Real estate is one of the most solid investments you can make. Don't pull out equity until you need the cash.
 
Mr Stubs said:
I’m thinking of refinancing my house and pulling out a bunch of equity for a future purchase.

You guys with experience with this or selling your home, etc, what do you do with the large sum of money while it’s waiting to be used?

Bank account? Interest bearing investments? Mattress?
Click to expand...

Hookers and blow, hookers and blow, baby. Make sure you make videos for the rest of us guys who are not good with money to live vicariously through you.:flipoff2:
 
What's the purchase? Now's not the time to be making any risky moves.
 
Mr Stubs said:
Very true.

But a seller isn’t going to wait for a purchaser to go through refinancing steps, hence my question.
Click to expand...

so what kind of time period? when i did this, i just resolved that i would sit on it for up to a year because i wasn't sure how much i'd need and being immediately liquid was a bonus. no 3+ day holds or anything like that.

made my purchase and just turned around with the balance and used it as a large payment. sure, i could have put it all on red and paid off the loan in full, instead it shaved off in interest alone about 1 for 1 what the extra payment was
 
You know the government just printed a boat load of cash! We might be headed into some hyperinflation in the near future. Sitting on cash might not be a good thing.
Take out a huge LOC in Vegas at a casino of your choice. Gamble it away on shitty slot machines and hookers.

Seriously: I hate cash. Love dividend paying equities. (DRIP):smokin:
 
I would keep it in cash until you spend it on the 4dee. Stock market is in an insane bubble and will most likely tank hard before the end of the year.

disclaimer:
I am not a financial pro at all
 
I'm in the same spot and dont know the answer. I'm going to pull a butt load of cash to be able to make cash offers on shitty property's. But who knows how long that will take.
 
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Mr Stubs said:
Shit.... and I was thinking you would be a good resource given your accolades.
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It's a crazy time man! I rolled over an IRA in April and have been sitting on 6 figures in cash and I'm still too chicken shit to do anything with it. So many unknowns right now, and theres not a good strategy as we are in uncharted waters, in a different sea in a storm on potentially another planet! Cash is king IMO right now, ability to buy some distressed assets will be real nice!
 
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Slander said:
It's a crazy time man! I rolled over an IRA in April and have been sitting on 6 figures in cash and I'm still too chicken shit to do anything with it. So many unknowns right now, and theres not a good strategy as we are in uncharted waters, in a different sea in a storm on potentially another planet! Cash is king IMO right now, ability to buy some distressed assets will be real nice!
Click to expand...

people are getting cash, long and short term, under 3% right now. cash is losing value by the minute.

if it is going to be spent in less than 6 months? yeah, hang out in cash. If more than that? no reason to have cash at the moment. I was apparently wrong in thinking the stock market would be testing earlier lows right about now, but oh well. maybe over the next 3-6 months some great deals will pop up
 
Provience said:
people are getting cash, long and short term, under 3% right now. cash is losing value by the minute.

if it is going to be spent in less than 6 months? yeah, hang out in cash. If more than that? no reason to have cash at the moment. I was apparently wrong in thinking the stock market would be testing earlier lows right about now, but oh well. maybe over the next 3-6 months some great deals will pop up
Click to expand...

Yea that's the jam I'm in. I was talking cash from an asset one has sold or took profits on, not buying something outright with borrowed money.

I was with you on market predictions. I think it will crash HARD before the end of the year and there will be another buy in point, right now SUCKS, if you want to buy, IMO.
 
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Mr Stubs said:
I’m thinking of refinancing my house and pulling out a bunch of equity for a future purchase.

You guys with experience with this or selling your home, etc, what do you do with the large sum of money while it’s waiting to be used?

Bank account? Interest bearing investments? Mattress?
Click to expand...

If you're not refinancing for the long term, I would consider a HELOC.
A pre-approved line of credit that you don't pay interest on till you use it.
A HELOC can also be paid down or off early, without having to pay off the whole mortgage, and be used over and over as long as you don;t exceed your limit.
Used to be able to write off the interest too, but Trump fucked that up.
 
SLiggwood said:
If you're not refinancing for the long term, I would consider a HELOC.
A pre-approved line of credit that you don't pay interest on till you use it.
A HELOC can also be paid down or off early, without having to pay off the whole mortgage, and be used over and over as long as you don;t exceed your limit.
Used to be able to write off the interest too, but Trump fucked that up.
Click to expand...

All the helocs I have seen are considerably higher intrest though. I suppose I could pay off a heloc with a 1st?
 
Slander said:
I would keep it in cash until you spend it on the 4dee. Stock market is in an insane bubble and will most likely tank hard before the end of the year.

disclaimer:
I am not a financial pro at all
Click to expand...

Slander said:
It's a crazy time man! I rolled over an IRA in April and have been sitting on 6 figures in cash and I'm still too chicken shit to do anything with it. So many unknowns right now, and theres not a good strategy as we are in uncharted waters, in a different sea in a storm on potentially another planet! Cash is king IMO right now, ability to buy some distressed assets will be real nice!
Click to expand...

Provience said:
people are getting cash, long and short term, under 3% right now. cash is losing value by the minute.

if it is going to be spent in less than 6 months? yeah, hang out in cash. If more than that? no reason to have cash at the moment. I was apparently wrong in thinking the stock market would be testing earlier lows right about now, but oh well. maybe over the next 3-6 months some great deals will pop up
Click to expand...

You have no worries that all of this BS free $$$ the feds have been creating is causing inflation and that the market *IS* now valued correctly, just horribly inflated compared to 5 months ago? I wished I had had the knowledge/stones to take a position like moving to cash and then back into the market at the right time.

I didnt. So i keep chugging along dollar cost averaging like a cuck. :flipoff2:
 
Clemson13 said:
You have no worries that all of this BS free $$$ the feds have been creating is causing inflation and that the market *IS* now valued correctly, just horribly inflated compared to 5 months ago? I wished I had had the knowledge/stones to take a position like moving to cash and then back into the market at the right time.

I didnt. So i keep chugging along dollar cost averaging like a cuck. :flipoff2:
Click to expand...

Get those limit orders set in there, when people go back to work and gambling opens back up and they all sell off, so all that cucking pays off!:flipoff2:

And no I think this is a straight up bubble and not valued correctly! I had to move to cash because my household income was about to go to zero, but my wife missed the "let's keep grandma and grandpa with emphysema from dieing so torpedo the economy" layoffs, so my strategy may change up a bit. Still don't know WTF to do with that IRA money, I dont have the stones to invest it at the top of a market with an economy ready to head off a cliff and two parties doing evreything in their power to make that happen!

If I was in Stubbs situation I would keep it in cash to buy distressed assets in a few months.
 
Pony_Driver said:
We have an election coming up. POTUS getting a second term bodes very well for the market.
Click to expand...

Slander said:
I would keep it in cash until you spend it on the 4dee. Stock market is in an insane bubble and will most likely tank hard before the end of the year.

disclaimer:
I am not a financial pro at all
Click to expand...
You're gambling on an election, if Biden wins, the market will sink like the Titanic.


OP, What rate are you at right now?

Guys, IF he pulls the Equity out in cash, could he then be liable for PMI? He would avoid it if he had equity, but the equity now gone int he form of the cash out. I think he would, but I don't know for sure.
 
grumpy356 said:
You're gambling on an election, if Biden wins, the market will sink like the Titanic.


OP, What rate are you at right now?

Guys, IF he pulls the Equity out in cash, could he then be liable for PMI? He would avoid it if he had equity, but the equity now gone int he form of the cash out. I think he would, but I don't know for sure.
Click to expand...

Not the op but I'm seeing 30 years at 2.64 apr and 15 years touching 1.99 if you want to buy it down a little.


As far as buying assets when the start selling for cheap.... well if anything they have shot through the roof in my neck of the woods. Travel trailer delarship is sold out, motorcycle delarship sold out... I tried to go buy my kid a new 50cc quad and the local delarship already had deposits for the next 80 comming in. He said he figures he has everything he will get in sold until 2022. Because of this 2 year old toys are selling for more then new msrp.

My neighbor is a local real estate broker so I pick her brain whenever I can since I'm new to the town. Currently there are around 300 homes for sale but she said she cant remember a summer where there were less then 900.

Crazy times
 
I can't remember that last time less than five property sales crossed my desk in a day.
 
2big bronco said:
All the helocs I have seen are considerably higher intrest though. I suppose I could pay off a heloc with a 1st?
Click to expand...

and that would sort of be the thing. if you aren't sure and have a variable timeline, a HELOC can make sense to get it done in the onsie/twosie type thing. once you have 'enough' of it spent that you are satisfied, a regular "refinance" to a 15 or 20 year or whatever fixed loan with a much better rate to pay it all off and lock it all in is pretty reasonable. the tradeoff is the year or so of higher interest that you'd need to pay and any associated orginiation costs on the two loans.

the reason I did not go with a HELOC was that I figured i'd be paying the interest on the money regardless, so it doesn't really matter if I pay interest on it for a year or two for it to sit in the bank, that is the same to me as using it immediately. all it does is take a year or two of payments off of the backside, but i'm looking at it as a loan that I fully plan to take to term and not a quick investment.

I've been on the fence about rolling my first and second into 1, but I've got 25 years left on my first and 11 or 10 years on my second. I don't think the couple percent interest I could save with a refi would be worth burying it, mentally at least, into a much longer note.
 
2big bronco said:
Not the op but I'm seeing 30 years at 2.64 apr and 15 years touching 1.99 if you want to buy it down a little.


As far as buying assets when the start selling for cheap.... well if anything they have shot through the roof in my neck of the woods. Travel trailer delarship is sold out, motorcycle delarship sold out... I tried to go buy my kid a new 50cc quad and the local delarship already had deposits for the next 80 comming in. He said he figures he has everything he will get in sold until 2022. Because of this 2 year old toys are selling for more then new msrp.

My neighbor is a local real estate broker so I pick her brain whenever I can since I'm new to the town. Currently there are around 300 homes for sale but she said she cant remember a summer where there were less then 900.

Crazy times
Click to expand...

yeah it seems like this crash is being mostly isolated to dollar value degradation and not asset value. i'm losing confidence that the DJIA will go under 20k anytime soon, if it does, it will be whatever the 'next' crash is.

I was hoping for some asset value loss, but oh well.
 
All the printed money pretty much assures the dollar will crash. But, it could be twenty years from now. Still, I would try not to be holding large amounts of cash. (Real or digital) If you're going to hold cash, better to be real. If and when the dollar crashes, it will slide fast. You won't be able to withdraw from a bank. (I'm not suggesting you hold 300 grand in cash at your house.) The reality is you shouldn't be holding more than 30% of your net worth in cash.

Im in process of selling a piece of real estate. If and when I sell, I will be looking for another real quick as I'm scared to hold that much in cash. As far as opening a line of credit based on your home equity, there is no problem with that. If cash takes a dive, so what.

I guess I need to check out the 4dea. Got a link?
 
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