Pay yourself first. Where to save money?
I purchase house for rental purposes and when I am not purchasing houses I save my money in a savings account. Soon I will have a substantial amount of money in my account. Banks do not offer a very good return on my money. Where is another place to hold my money and get a better retun on my money besides the stock market? Is it better to pay extra each month on my houses and then when I need money get a home equity loan?
Have you thought about opening a Self Directed IRA? Use that IRA to purchase your homes.
There are lots of things you can do, but you need to be a bit more specific in your post.
Ho...
IRA would be ok but I need the money to be easily accesiable. I think an IRA is taxed when I withdraw. I just want a place to save my money where I get a better return than a CD or money market
The problem with putting more money in your equity is if you are doing it for a rainy day. Then the question is what will be on your credit when the rainy day comes? Are you going to have to pull money out to catch up on bills and if so your credit is probably already effected and you will be hard pressed to find an equity loan. This may not be your case.
The other problem with putting money in equity by making extra payments is the amount that actually goes towards principle v’s what it would cost to close an equity or refinance especially if you are talking N/O/O. Also you have to remember that we are in the best interest rate ever and if you need to pull money out in 2 or 5 years what will the interest rate be? You dont know, and say you have a 100k mortgage with a 6.5% today and you want to pull some money out in 4 years and the new loan is 140k with an 9% interest you have lost, if you could have put money other places. I am not saying that equity is a bad thing, for most everything it is a great thing, but if interest rates jump, and they will, your equity really works better for you then if you sell your property or take the money out to reinvest. I would also not be putting a lot of money in the equity because with the rate of inflation you are covered if you need to pull out money. Also a huge disadvantage to putting money to equity is the time it takes to do an equity loan and a refinance. You may need your money this week not in 2-4 weeks. Also if you are talking about reinvesting in other property some lenders require seasoning of funds and that could be 1 month to 12 months and most banks to not take equity or refinance c/o as immediate funds, unless it has been in the bank or stocks or other liquid assets for -X- amount of time. So you could loose out on a deal unless you have liquid assets.
Angela
[ Edited by Crayon on Date 02/01/2003 ][ Edited by Crayon on Date 02/01/2003 ]
Hi,
I would open an ING savings accout. They return 2.3% a year (which is more than most CDs) Let me know if you are interested, and I will forward you a link where you can get 25 dollars if you open an account w/ them.
Hi
There is a compnay out of Las Vegas, maybe John is familiar with them , called Vestin Mortgage. They invest in RE loans for construction. They hold the $$ for at 12-18 months kinda like a CD but their return is 12.97% apr. There are others companies like them but they require a much larger deposit (25-50k) Vestin min dep is 2k. Its not for everyone there is risk involved. Just an FYI