Down-payment Options
Hello!
I currently own a house I am interested in renting out when I purchase the next one. This has a lot to do with the interest rate being so low (2.85%) and looks like I can get a decent monthly rent for it.
However, I don't have the cash on-hand to afford a 20% down-payment for the next house I purchase. I've looked into some options, but am curious what this community would do? A quick note, I have around ~30k in a taxable brokerage that I could use for this, though it's currently down around ~$1k as an investment. Not sure If I should touch it or just leave it to grow right now. It would only cover <50% of what I need.
Options:
- Home equity loan. (I have 100k+ in equity in my current house) or some form of 401k loan / HELOC / using ROTH IRA contributions. But It seems like the equity loan is the best option given that I won't be able to pay back the loan amount in a relatively short amount of time.
- Father-in-law has agreed to cover the down payment in some form of loan agreement. Originally he pitched splitting the earnings from the rental 50/50. He's a stand-up guy, so he won't rip me off, but I'm not sure how to design a mutually beneficial arrangement? It's not a gift, he would want to make some money as an investment.
Thanks for any and all advice!