dave@cylixd.UUCP (Dave Kirby) (12/11/85)
In article <923@terak.UUCP> suze@terak.UUCP (Suzanne Barnett) writes: >...If I sell a house for $100,000, to avoid capital gains tax I must >buy a house costing $100,000 or more... >Suppose the remaining mortgage on the house I sold was $70,000. That >means I receive $30,000 minus realtors fees and closing costs. I do >NOT have to place that $30,000 down on my new house... That is correct; however, your monthly mortgage payments would be higher on the new house if you don't put all your equity into the down payment. Example: suppose you had put down $5K on your $75K house, and the monthly payment on the remaining $70K was $700/month PITI. If you sell the house and buy a $100K house, and put minimum down on it (say $10K), you keep the extra $20K, but now your monthly payment on the remaining $90K is about $900/month PITI. So if you do this, make sure you invest that remaining $20K in such a way that the return will at least offset the extra $200/month you will have to pay on your mortgage. That would require a return of $200/month = 1%/month = 12% annually in the example cited above. ----------------------------------------------------------------- Dave Kirby ( ...!ihnp4!akgub!cylixd!dave)