Quote from @Leo R.:
@Vladimir Gostrer as others have said, you can get a mortgage for a primary residence with as little as 3.5% to 5% down (and also get the generally better rate and terms that come with a primary residence mortgage)--this is why your plan of buying a new primary residence is such a smart plan. On the other hand, if you went out and bought a new investment property (which would require an investment mortgage), you'd probably need to put 20% down, and your rate and terms would be less favorable.
This is why it's advantageous to buy as many properties as possible with primary residence mortgages instead of investment mortgages. There are regulations about how long need to live in a primary residence before you can qualify for another primary residence mortgage--it's usually a year. There are also some regulations about how long you need to live in a primary residence in order to avoid capital gains taxes (I believe it's usually two years), but you'll want to verify all that yourself. There is also a limit on how many primary residence mortgages one person can have, but I can't remember that number off the top of my head...perhaps it's 10? (but don't quote me on any of these numbers; verify them yourself).
A lot of folks have built excellent portfolios with locked-in low interest debt simply by moving to a new primary residence once every year or two, and repeating that process until hitting the limit on primary residence mortgages.
Congrats on your strong equity position!
Good luck out there!
Extremely helpful. Thank you. The natural next question I have is if I can combine the two? 970k won't get me much in the Bay and I'm looking at something closer to 3M right now. I have enough cash to cover 20% on 2M, but 3M might be a bit tighter.
