Profile picture for stirewalt

Should I sell my home now and purchase an affordable home that I can pay off in 10 years?

I am 55 years old. I have a 30 year mortgage. I purchased my home in 2004.  The purpose of buying this home was so that I could sell it and purchase something else at a lower mortgage price. Hopefully enabling me to have my final place of residence  paid off by the time I am 65 years old.  The bust in 2008 has kind of squashed my plans and now I am wondering if I should go ahead and sell it now and purchase an affordable home that I can have paid off in 10 years.It is taking so long for it to increase in value and I am putting all this money into a home that I will not be able to pay off.
  • July 19 2012 - Lomita
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Answers (6)

It totally depends on what the dollar for dollar cost between the two situations. Rates are very low right now, so refinancing might achieve the same goal you are looking at. 15 yr fixed mortgages are on an average rate under 3% currently according to mortgage news daily.

You may be able to refinance the home to a 15 yr fixed given you have been in it for quite sometime now, and not have the payment increase. You should talk with a mortgage professional about your refinance options before you force the sale.
  • July 27 2012
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Dear stirewalt,
I think it's a good plan for you provided you can get a good price for your present property.
  • July 27 2012
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If a person sells one home and buys another close to the value of the one they sold, market conditions don't affect them too much. For example, if you paid $200,000 for a home and prices crash to the point you can only sell it for $100,000 that's not so bad if you buy another home for $100,000 that used to be worth $200,000. The market in [hotlink removed by Zillow moderator] is brisk and now might be a good time to buy. I believe it is better to buy a home you can afford and move up in steps than to buy a home that is too much of a stretch.
  • July 26 2012
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Taking into consideration the facts you have expressed, I would say yes, the money you would save would be phenominal!

  • July 25 2012
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Tough question, but here are some additional thoughts to consider. There is a black and white aspect to your question, but there is also the emotional side to your question. The bottom line is what will help you sleep easier at night. Each of us view debt differently. You need to weigh the enjoyment you currently get from your home, with the enjoyment and peace of mind that living mortgage free will provide you.

From a financial standpoint, as Brian mentioned, if you are selling and purchasing within the same community, you may sell for less, but likely also purchase for less. Don't forget to factor in any selling and closing costs as you calculate the sale and the purchase. If your new purchase is smaller, you may also have the benefit of lower maintenance and upkeep costs to factor into the financial picture you are trying to create. Contact a local Realtor and have them provide you with some market metrics for your neighborhood and the neighborhood you would target if you should buy again. Another thought, with rates as low as they are right now, would it be possible for you to refinance your current note into a 15 year or 10 year mortgage. The more data you can collect, the more informed your decision will be.


Best of luck!

  • July 19 2012
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Profile picture for Brian Beard
Great questions! Alot depends on the market where you are, but the market's always seem to be an economy of scale i.e. if you are selling for less than you can also be buying for less! Values are coming back BIG in some areas for example where I am in Palm Springs, CA we have seen values go up over the past 18 months and with mortgage rates low, buyers seem to sense the market and are out in full force. The current problem is inventory and that seems to be across the board...That's where timing is a real factor but if you are ready to sell it would be a great time! Hope that helps.

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Brian Beard (Lic: 01494669)
Luxury Homes by Keller Williams (Lic: 01417409)
435 N Palm Canyon Drive
Palm Springs, CA 92262
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  • July 19 2012
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