Using profit from sale of SFH to put into stock market
Hello,
I am new to the BP community and would like some advice on a situation that I am now in.
I recently purchased a new home in the Seattle area and am getting ready to put my current house on the market. I have a 30yr fixed at around 3.5% on my new house, and have a decent amount of equity in the current house I am going to be putting on the market. My new mortgage will be approximately twice as much as my current, but I would like to keep my payments more or less the same as they have been.
My thought is this : is it a wise strategy to take the profits from the sale of my new home and put it in the market (low cost ETFs through Vanguard) and not pay down my new mortgage. I was thinking that I would keep 6-12 months of the difference between my current and new mortgages in cash, and have the balance in the market; liquidating stock when the next round of cash is needed for payments.
With the market returning an average of 7% annually over the long haul, it seems that 30 years of growth on this cash would make way more money than a smaller mortgage over the same amount of time.
Sorry if my question is a little vague or long winded...
Thanks!