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Answers (19)
- Jason A. Kapit Esq.
- Contributions:133
Couple things -
[1] You assume that the market will improve in 3 years - don't! The best you can do is make deicsions based on market conditions now. Don't make decisions based on what may or may not happen. Evaluate your position based on the needs of your family and what you can emotionally handle. Being "house-poor" (having just enough to make your mortgage payment and the bare essentials) is a stressful existence. If that is the state of affairs you are in, it's time to sell, downscale your lifestyle and start doing things that allow you to sleep easy.
[2] If anything I said sounds familiar, you are better off selling, renting an affordable home in an area you like, and putting together a plan of action that is attainable and gives you motivation to make it happen.
[1] You assume that the market will improve in 3 years - don't! The best you can do is make deicsions based on market conditions now. Don't make decisions based on what may or may not happen. Evaluate your position based on the needs of your family and what you can emotionally handle. Being "house-poor" (having just enough to make your mortgage payment and the bare essentials) is a stressful existence. If that is the state of affairs you are in, it's time to sell, downscale your lifestyle and start doing things that allow you to sleep easy.
[2] If anything I said sounds familiar, you are better off selling, renting an affordable home in an area you like, and putting together a plan of action that is attainable and gives you motivation to make it happen.
- confused8
- Contributions:8
Well, my thought about selling the larger home and buy a smaller more affordable home is that I don't know how long I would live there. My future is unknown, I may land a job that takes me to another town or may decide to start over in a new place. I moved where I'm living w my X 8 yrs ago and my children are off on their own out of state and i don't have any family in this town, so i could decide to relocate and then be stuck trying to sell the smaller home. How long does living someplace make it worthwhile to buy instead of renting?
- Brek Schutten, "brekschutten"
- Contributions:68
Would you be able to sell your current home and buy a smaller home? This way, you would reduce your current payments and continue to build equity with your payments. I don't know all of the details about your current situation, your housing market, and what you owe right now, but I do know that where I live it is quite often cheaper (monthly) to buy a home than it is to rent.
- confused8
- Contributions:8
Thank you sunnyview, your name is so appropriate. It is such a hard decision to make and very emotional, your to the point and clear opinion was helpful and funny somewhat comforting to at least have a plan of action. have a great day, and thank you
- sunnyview
- Contributions:25120
If I were in your situation, I would try to sell the house and not wait. In many areas, it is more likely that your house value will drop a little more or stay flat in the next three years than go up significantly.
In that case, selling and renting is a better option so you can avoid losing any more value and you can also protect your credit from late payments or unexpected house repairs. I would call several local agent and ask them for a CMA (comparative market analysis) for your house. Ask them for a 60 day list and sale price, a 120 day list and sale price and 180 day list/sale price. Also ask them the average days on market for a house like yours.
Get all the information you can, find agent that is realistic about price in their CMA and then make a plan that will help you remain financially stable during your alimony period.
In that case, selling and renting is a better option so you can avoid losing any more value and you can also protect your credit from late payments or unexpected house repairs. I would call several local agent and ask them for a CMA (comparative market analysis) for your house. Ask them for a 60 day list and sale price, a 120 day list and sale price and 180 day list/sale price. Also ask them the average days on market for a house like yours.
Get all the information you can, find agent that is realistic about price in their CMA and then make a plan that will help you remain financially stable during your alimony period.
- confused8
- Contributions:8
The market is not too bad compared to the national average we have not been hit like some areas, things are selling, just taking a long time to sell and competitive, but my home is 8 yrs old, in great shape and in a very nice neighborhood.
RochelleMezzano, I'm not sure what you mean that selling in a declining market mitigates more loss for the homeowner. I would not sell my house for a loss from what I paid 8 yrs ago, but I would not be making a much of a profit. The feature I'm stuck on is it better to pay a much smaller rent than my mortgage and be saving money but throwing rent money out the window and not building more home equity, or the home equity I build in say 3 more yrs of staying will not make up for selling my house in a few yrs and having the value of homes be further down
RochelleMezzano, I'm not sure what you mean that selling in a declining market mitigates more loss for the homeowner. I would not sell my house for a loss from what I paid 8 yrs ago, but I would not be making a much of a profit. The feature I'm stuck on is it better to pay a much smaller rent than my mortgage and be saving money but throwing rent money out the window and not building more home equity, or the home equity I build in say 3 more yrs of staying will not make up for selling my house in a few yrs and having the value of homes be further down
- Rochelle Mezzano, "RochelleMezzano"
- Contributions:242
When a home is sold sooner rather than later in a declining market, the homeowner is able to mitigate more loss to both the homeowner and the bank as well as the immediate neighbors. So it depends if you are located in a market that is continuing to decline.
- Ryan Bos, "ryanbos"
- Contributions:131
Where is the home located? Depending on the area now may actually not be a bad time to sell. Let's look at what you could get if you sold vs if you were to rent the home out for the next 3 years. You want to make sure you live in the home 2 out of the last 5 years to get your tax deductions and net the most out of it.
- Patricia Lemme, "plemme"
- Contributions:7
I had another thought, could you rent out a few of the bedrooms? You'd be surprised what you might receive in rental money and it would take off some of the pressure of the mortgage payments. My husband and I are in a large home without our kids and every so often we rent a bedroom for a while to cover some of the houses expenses.
- Jim Basquette CRS, CNE, "Jim Basquette"
- Contributions:1231
If the home is more home than you need, it is always a time to consider selling.
I would not count on an increase in equity in 3 years, it could happen, but it is not certain. Look at the amount of your payment that is interest and the portion that is principal. You could be paying more in interest, taxes and maintenance than your rent on a smaller place. You could also pay less in utilities for the rental. All of this is savings over staying in your house.
The principal will pay down the loan and reduce any loss or increase any gain of the home's value over the next 3 years.
I am guessing that in your case, you will decide to sell now.
I would not count on an increase in equity in 3 years, it could happen, but it is not certain. Look at the amount of your payment that is interest and the portion that is principal. You could be paying more in interest, taxes and maintenance than your rent on a smaller place. You could also pay less in utilities for the rental. All of this is savings over staying in your house.
The principal will pay down the loan and reduce any loss or increase any gain of the home's value over the next 3 years.
I am guessing that in your case, you will decide to sell now.
- Maria Morton, "MariaMorton"
- Contributions:716
If I were you, I would sell now and put that 200k away for the future. You could rent for a year or two while you get used to your new life. Keeping your monthly bills lower will take some of the pressure off you now.
- confused8
- Contributions:8
Thank You Wetdawgs, I appreciate your help. It is very overwhelming making this decision on my own, I don't have much experience with the housing market and finances. At mid 50 to be trying to support myself after being married 23 yrs and having a husband support the finances is a lot to figure out.The next step will be to land a job but I can now start the process to sell my home and move on. Thank you so much
- wetdawgs
- Contributions:26784
Will equity increase enough in three years? Probably not. In many communities in this county house prices will be the same or lower than today. If I were in your shoes, I'd be getting ready to put it on the market.
- confused8
- Contributions:8
All really good advise, my house is a 4 bedroom 4000 sq foot that is a lot of house now that I live here by myself. Kids off to college and now single.
Is the thought that the equity will appreciate enough in 3 yrs to make up for the higher mortgage payment than spending half the amount in rent (that is going out the window) but much cheaper to live in than big home
- Dan, "the_country_hick"
- Contributions:4691
What state do you live in?
Overall real estate will be losing value and going lower in price. If you are that tight I would sell just to be safe.
If you can rent cheaper how much cheaper? House buying price per month and rent price per month should be close to each other. That is a sign prices should drop more.
Peter Schiff: Here's Why Home Prices Have To Decline At Least 20% And Probably More
Shiller: Housing Could Fall Another 25% But Is Harder to Predict Than the Weather - Yahoo! Finance
How Interest Rates Affect Property Values
Even the federal reserve is saying house prices are to high and will go lower. Read below.
The Fallacy of a Pain-Free Path to a Healthy Housing Market - Economic Letter, December 2010 - FRB Dallas
Overall real estate will be losing value and going lower in price. If you are that tight I would sell just to be safe.
If you can rent cheaper how much cheaper? House buying price per month and rent price per month should be close to each other. That is a sign prices should drop more.
Peter Schiff: Here's Why Home Prices Have To Decline At Least 20% And Probably More
Shiller: Housing Could Fall Another 25% But Is Harder to Predict Than the Weather - Yahoo! Finance
How Interest Rates Affect Property Values
Even the federal reserve is saying house prices are to high and will go lower. Read below.
The Fallacy of a Pain-Free Path to a Healthy Housing Market - Economic Letter, December 2010 - FRB Dallas
"you could at least be increasing your equity..."
except that in many places, homes over $500K are falling in price. Phoenix, the market in aggregate has stabilized, but over $300k is still going down hard. The stability is only at the bottom end.
except that in many places, homes over $500K are falling in price. Phoenix, the market in aggregate has stabilized, but over $300k is still going down hard. The stability is only at the bottom end.
- Ethan Lacoe, "EthanL"
- Contributions:8
If you're able to, I would hold off on selling. You would at least be increasing equity in your house in stead of your monthly payments going to someone else paying off equity.
- confused8
- Contributions:8
The market is selling for conservatively priced homes. I have $370,00 left on my mortgage and would probably get $570,000 for my home. I'm thinking rent would be around $1500 a month. Thank you for your help
- Angie Boggeman, "angie boggeman"
- Contributions:469
How are the values of the homes where you own? Does the market value seem to be increasing where you are at or decreasing? Do you have a mortgage? What would the approximate rent be? In other words that are so many factors to consider. The best advice would be to speak to a local real estate agent and a financial advisor.
Please advise if I should sell
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