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want to either sell or rent our house and buy a cheaper house

Okay, so our house has lost a lot of value since we bought during the boom years. Luckily, we are not quite underwater, but close to it. Also, we own an antique house and it is harder to sell than a newer home. Selling it would take a long time if we could even get a buyer (not much is moving where we are in MA). We are wondering whether we should do a sale by owner (which would allow us to keep the price lower and make it somewhat more likely to sell ) or whether we should go for buying a cheaper, more affordable home we've been thinking of. We bought our current house for 230k, it's worth about 175 to 180 now, we owe 168 on it. Our income is 90k salary and 10k in almost guaranteed bonuses. We pay 1272 for mortgage and taxes, 0 credit card debt, 0 car loans, but a window loan for 364/month.  We pay 600 for private schools for kids (town schools here suck), but we would drop this to 0 if we moved to this other house in a better town. Price of other home is 85k but it is a short sale (could be a real pain)...Reason for doing this: We feel we pay out more than it is worth to stay here (private schools etc..) when we could pay out a lot less (0 for schools and about 650 for mortgage instead of 1272)..What would you do??? Thanks for help!
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May 17 2011 - Worcester
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It's always a good idea to cut your expenses, so I think you're on the right track!  It's not true that "not much is moving" in MA.  Homes in your price range are selling. 
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May 17 2011
Profile picture for wetdawgs
It is clear you've already identified a home that you are interested in, yet your current home isn't on the market.    

You wrote (paraphrased)  "FSBO or buy a cheaper more affordable home".  I'm not sure why there is an "or" connecting the two phrases.  

Do you have a substantial down payment (e.g 20 to 25%)?  

Can you handle both mortgages on your current income?   (i.e. will a lender think your are capable of carrying...)

If the answer to either (or both) of these questions is "no", then I'd recommend slowing down in the process.   You may be thinking that rent would count towards the income qualification, but that is only true if you have two years documented (i.e. in IRS filings) for rent and then only 75% of the rent.

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May 17 2011
Msvangogh,

WOW...deep breath!  That is a lot to consider (the two houses, moving, mortgages, market values, private schools, aged houses etc) and there are many options - renting, buying, selling, schools. 

The good news is...this is a flexible market with many financing options. 

My first suggestion is to prioritize - what is most important (schools? cash flow?) and then sit down with a realtor and a mortgage broker.  The type of move you are thinking about making requires both.  The realtor can provide you with a true market value of your existing homes and options for new homes and the mortgage broker can provide you with your financing options.

Once you have that - then you can make an informed decision.  It might be that it's better to rent out your current home and wait out the market.  Or that it's better to put the antique home up for sale.  It's best to have the most accurate information in front of you. 

That's my two cents! :)

Amy

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May 17 2011
Profile picture for wetdawgs
Please don't give business to those who violate the good neighbor policy by soliciting business in posts.
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May 17 2011

I would suggest that you consider refinancing and try to consolidate that second mortgage for the windows. Restructure you debts and look at amortizing your loan for 30 years to bring your payments down. You can get good advice from a Licensed Mortgage Professional that specializes in helping homeowners with dilemmas similar to yours.

Furthermore, you may find it difficult finding another home that will cost you less monthly than what you are currently paying. It appears that the window loan may be putting a bit of a strain on your finances. I can help you with these matters if you would like to speak with a Licensed Mortgage Professional.

 

I wouldn't complain about the school system too much. It may make it harder to sell your home to a family with children. Remember, that this is a public forum and what you say out of place will be all over the internet by morning.

 

Let me know if I can help

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May 18 2011
It doesn't sound like you are in a position to buy and then put you current home on the market.

I suggest you list your home with a local agent, instead of a For Sale by Owner. After you accept an offer, start looking at properties.

Happy funding, Rudi
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May 18 2011
Highly suggest you  list your home with a local agent, instead of a For Sale by Owner. After you accept an offer, start looking at properties.Good Luck.
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May 19 2011
You have gotten the answer people are always going to move for their own personnel reason.  This market currently is a tough market.  If moving is going to change your family life for the better it is worth making the change.  I saw that schools played an important part of this decision there could be other expenses to the move that you have not mention.  Are you increasing travel time to move?  This can also be an important factor to think about.  If you buy the bank short you are talking about is there extra repairs that you are going to need to do.  As for selling your home if it is a unique property then you maybe waiting longer for the sale of your home, either with an agent or FSBO.  Homes do sell as a FSBO but it can be harder if the property is unique.  Many of the FSBO homes sell to people that the seller already knows.  It is also alot of personnel time on your part.  If your salary  depends on bonus is this income earned by putting in extra time at work would that be lacking if you are busy selling your home yourself.  I guess in conclusion you have to be aware that in this market it could be awhile before you are making this move.  I would suggest your start with getting a CMA done or an appraisal to see if your home is in the price range you think and how long this home will take to sell.  Oh about the landlord business just like FSBO it is time consuming.  I would suggest if you are thinking of this my first concern would be the lead issue.
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May 21 2011
 
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