Keeping existing house we been living in 20 years and buying new

[James Freeman]

What would be the best way to keep our existing house with good equity and finance a new house? 401K loan? Equity from current house? How much should we pull out if we refinance our 1st mortgage? We have never owned new, is this advisable in the round rock market or should we look at a seasoned home ? We are also interested in a pool so the existing market is somewhat smaller than normal.

We would like to rent out our current home and upgrade to a nicer / larger home if possible.

[Zachary Barton]

@James Freeman Assuming you don't need the equity to close on your next property, your money would likely be better served elsewhere. You can be making a 10% return on your equity each year, in this case around $16k/year or $1,300/month NET after ALL expenses including PITI, management fees, and a Capex/repair fund. If you're not able to hit those numbers (or come close), then I would encourage pulling out your cash and hunting for deals. Because you bought 20 years ago its possible your monthly payments are low enough to provide you with that kind of cash flow, so you will have to run the numbers for your situation.

KB had a bad rep for a long time, but they have been working hard to deliver a better product for the past several years. Be careful thought they will get you with the upgrades!