Rely on stocks to pay mortgage?
How much worth of stocks do you sell each year to pay mortgage? Want to get an idea how many people actually do this. #mortgage #housing
I sold stock to buy, but made sure I could cover payments on base salary alone. Glad I don't have to sell any stock right now
Just curious, how much did u sell to cover the downpayment?
Sell to buy is fine. Relying on stock to pay monthly mortgage is a bad idea.
Would it be bad to make lump sum payments from stock to pay it down faster?
Probably; it's very likely your stock will have an average roi over 3% over a long period of time.
Wouldn't be harmful, but it's a question of opportunity cost given other things you could do with your money. If you don't have a good emergency fund (I'd say 6+ months essential expenses inc mortgage) build that up before making extra mortgage payments. If you get laid off etc, you don't get mortgage payments suspended for a few months because you previously overpaid. Also, if you have a low interest mortgage you may prefer the likely more profitable rates of investing the RSU cash.
This greatly depends on what proportion of your income is based on equity. If you make 1m a year at amazon and your base is 185k you likely use your rsus as monthly income. If you make 200k and your base is 180k you should obviously avoid. The higher your income the more folks use equity. As a better rule of thumb consider keeping your total housing expenses less than 30% of your total income.
Is that 30% gross or net? I think 30% gross isn’t bad but if talking net many folks don’t make enough. a $4k mortgage payment means you bring home $13k a month net of taxes, 401k, etc. you would have to earn at least $250k base plus. Many aren’t earning that without RSUs. Also $4k a month is under $1m home unless you put down more then 20%
You can include RSUs in the 30% calc. It's usually against net income, but that would also include things you mentioned like 401k even if it doesn't show up in your direct deposit.
I am investing all my savings (minus 6 months fo expenses) to eventually pay off my house. But, wouldn’t want to take out my investments to pay my mortgage. It’s all about compounding your gains, imo.
So all of your investments are RSUs?
Why would you pay off your mortgage?
Don’t bury too much money in real estate. You may need cash to weather the storm. Home prices are a bubble. http://www.kondratieffwave.com/housing-crash/
This video sucks
Don't most people consider their TC when they buy a home? I'm sure a non-trivial portion of it is funded by RSU
Lenders typically look at salary.
For me it's tight but I only pay mortgage and taxes, insurance, based on base, not even bonuse. I use bonus for home improvements
I have a house paid for with RSUs. Short answer for you: as much as possible I now get to choose what I want to do with the RSUs instead of playing games by having a mortgage as well as investing (look at how that’s working out)
Bad idea