How to reinvest Home Sales Profits

[Chad Dickinson]

Hello,

Newbie here. I am divorcing and selling our home and splitting the profits of which should be about $250K per. I have chosen to rent for the next 12 months as I figure out where I want to live. Debt free and college is covered for both children.

I have another home that I own and rent my parents in a 55+ development. I carry a mortgage on that property of about $215K and basically rent it at a monthly loss of about $250 per month. The mortgage is a 7 year ARM and has about 5 more years before it could adjust. It is currently at 3.5% and my parents are in their early eighties.

I was debating if I should use the profits from the sale of my current home to just pay off the mortgage my rental property? I do right off the interest payments on this property of about $630 per month but if I paid it off, then I would be saving that amount roughly every month.

I was thinking, if/when I decide to buy a new home, if I needed money for the down payment, then I could get an equity line from my rental property. It was purchased for $280K and is appraising for about $350K now.

Should I pay off that mortgage or put the $250K in an IBond and leave it there for a year or so? I do have stocks but I wasn’t thinking that I should play the market but if the stock market keeps getting hammered, then I could see myself waiting to get some blue chips as the time to buy is when there is “blood in the streets”.

Any guidance or advice would be appreciated. Thank you, CD.