So maybe we'll just rent awhile...

[maziwanka]

if ur payign rent your not investing in anything...your money is just gone..

 

[BooGiMaN]

i believe if you dont roll over the equity into new house youll be taxed on it ...u have liek a year or two to do it...im not really sure

 

[SagaLore]

Originally posted by: maziwanka
if ur payign rent your not investing in anything...your money is just gone..

if you're paying interest you're not investing in anything...

Okay here is a recap why we're selling:

1. Neighbors suck, they are the suckiest sucks that ever sucked
2. House is right again main street, and immediate neighborhood has bad kids, not a good place to raise kids
3. Creek at end of the property, flooded in 73, potential problem if it floods again
4. Siding on house is asbestos, it's deteriating quickly, don't want to reside
5. Values of houses in this area are going *down*, not up
6. Interest rates are low now, which will help sell this house, otherwise it will be stuck on the market for a very long time
7. Wife hates it here 🙁 Even though she picked this house!

I told her next time I'm picking. 😉

 

[CrazyDe1]

Originally posted by: TwinkleToes77
And you cant possibly stay there for 3 more years? Right now you are just paying off the interest. You'll see at the 5 year mark what a huge difference it makes in equity

Unless you went with an ARM...I think you gain more equity with an ARM

 

[CrazyDe1]

Originally posted by: SagaLore

Originally posted by: TwinkleToes77

Originally posted by: Tiles2Tech

Originally posted by: TwinkleToes77
And you cant possibly stay there for 3 more years? Right now you are just paying off the interest. You'll see at the 5 year mark what a huge difference it makes in equity

That's not entirely true. It really depends on what is going on with the economy. While our place only appreciated about $5K in the first 5 years because the economy wasn't so hot, the next 7 years it jumped about $165K in equity. However, the next 5 years, things could settle down. Home prices are expected to rise more slowly (e.g. - 4% a year.)

Yeah, I really dont know that much about mortgages. All i know is what is going on with out own place. But i still say ditching a house after only 2 years seems like a major waste.

🙁
My marriage depends on it. Living here is upsetting my wife that much.

She needs to deal with it...I can't stand people that can't just sack up and deal with it...

 

[huesmann]

Originally posted by: Tiles2Tech

It isn't going to affect your auto insurance unless you move into a high crime area.

I think he meant that because he had an auto policy and a homeowner's policy through the same agency, discounts were given. Since the house is being sold, the homeowner's policy will be cancelled - and the discount will dispappear - making the automotive insurance rates seem a bit higher.

Any discounts are minimal. Insurance co isn't going to cut you that big a break just because you have both policies with them.

 

[FeathersMcGraw]

Originally posted by: SagaLore

if you're paying interest you're not investing in anything...

Paying interest alone doesn't make an investment, but a house is typically an appreciating asset. Those interest payments are tax-deductible, however, so even so, you're still likely to be ahead when you compare equivalent rental and mortgage payments (assuming that you itemize, and why the heck wouldn't you?).

Originally posted by: CrazyDe1

Unless you went with an ARM...I think you gain more equity with an ARM

Depends on your amortization schedule, but I doubt it. Just because you're paying a lower (initial) interest rate doesn't necessarily mean that more of your payment goes toward principal, because your monthly payment is lower.

 

[aircooled]

Originally posted by: SagaLore

Originally posted by: maziwanka
if ur payign rent your not investing in anything...your money is just gone..

if you're paying interest you're not investing in anything...

Okay here is a recap why we're selling:

1. Neighbors suck, they are the suckiest sucks that ever sucked
2. House is right again main street, and immediate neighborhood has bad kids, not a good place to raise kids
3. Creek at end of the property, flooded in 73, potential problem if it floods again
4. Siding on house is asbestos, it's deteriating quickly, don't want to reside
5. Values of houses in this area are going *down*, not up
6. Interest rates are low now, which will help sell this house, otherwise it will be stuck on the market for a very long time
7. Wife hates it here 🙁 Even though she picked this house!

I told her next time I'm picking. 😉

#6 (and maybe even #5) are reasons you should buy another house rather than rent.

 

[vi edit]

Depends on your amortization schedule, but I doubt it. Just because you're paying a lower (initial) interest rate doesn't necessarily mean that more of your payment goes toward principal, because your monthly payment is lower.

I did the math on our latest re-fi. We went with a 7 year ARM over 30 year.
Payment Principal Interest Cum Prin Cum Int Prin Bal

(7 yr ARM) 84 192.31 433.85 13607.70 38989.74 101392.30
(30 yr conv) 84 173.19 516.29 11914.40 46001.92 103085.60

With the ARM you only gain around an extra $1700 in equity, but payments are $626 a month on the ARM vs. $690 on the 30 year con. That works out to be $5376 extra in my pocket over 7 years.

 

[SagaLore]

Let's put it this way:

If we buy, it's going to be another small house that needs fixing, and we'll probably sell it again in a few years.

If we rent, we don't have to fix anything, no closing costs, no interest, no taxes, no insurance. Then buy in a few years.

So if I plan on getting a nicer house in a few years, do I buy or rent?

 

[vi edit]

So if I plan on getting a nicer house in a few years, do I buy or rent?

If appreciation is slow(or non-existant), and you have a slow moving market, and you plan to buy a different house in a couple years, I would say that it would be unwise to buy another house(assuming you have little to no equity in your current one).

It just sounds like your housing market sucks. You'll have to get lowballed to sell your current house, then you have pay closing costs on the new one which is money in the whole, it sounds like your property value never really goes up in prices, and then you have to do the same thing all over again in a few years.

Where I'm at, is a different story. My house has gone up $15k in value in 2.5 years, and I've watched 5 different houses identical to mine be sold FSBO in less than a weeks time. No need to sit on it forever before it sells, no need to undercut myself to sell it, and I don't have to dick with realators to get it sold and loose 6% commision on the sale.

 

[Johnbear007]

Originally posted by: SagaLore

Originally posted by: vi_edit
It really breaks down to what rent is going for in your area.

As for the costs of insurance, your car insurance may go up 10%-15% if you drop your homeowners insurance off of the policy, but, then again, you aren't going to be paying home owners insurance which could easily be anywhere from $300-$1000 a year. So you'll probably actually end up saving money that way. Sure you'll want to pick up renters insurance, but it's a fraction of what homeowners is.

For renting itself - you'll be dropping property taxes, PMI(if you have it) & homeowners insurance, plus any other possible repair and maintanence bills you may receive for normal wear and tear on the home. So that is a savings right there.

The key is, how cheap can you get an appartment that you would actually enjoy living in? And what are you currently paying right now?

If your mortgage is under $600 a month, I don't care where you live, you are going to be VERY hard up to find any sort of a decent place to rent that comes anywhere close to the amount of space you currently have and save any money in the deal.

Also, with this early into your current mortgage, nearly all of your payment is interest. Probably around 80% of it actually is interest. Depending on your tax bracket, you might get up to 30% of your interest back on your taxes. So take that into consideration also.

If your P&I on your mortgage payment works out to be $1000 a month, you might get back around $3000 on your taxes making that $1000 payment realistically $700 (at this point in the loan).

Only you can do the real math on it. How much is your current mortgage, and how is rent in the area?

Including escrowed property taxes and insurance, our payments are just shy of $500 per month.

It depends on what we want to rent. If we rented another house, of course that is going to be more than what we're paying mortgage for. But if we rented some place small, there are some apartments going for $345 per month. Last year we were paying about $100 to $150 per month in heating costs alone, but when I had an apartment in college, heat was like $30 per month. We have a 3 bedroom house with no kids...

It all depends on your area. 345$ a monthy around here would be major ghetto trash. I pay 720 a month for a 2 bedroom 1050 squarefoot place. Includes a REAL garage with garage door opener. ITs the best price/quality place to live around here. I moved in 3 years ago when it was brand new. It's on the outskirts of a larger city, so rents cheaper, if you want to live downtown you pay more and get less.

345$ is pretty crazy, I imagine that must be ghetto almost anywhere in the country. I would tell your wife to grow up and not throw away those 2 years, stick it out and build some equity.

 

[alkemyst]

That's what I am doing.....I got lucky though $500/month for a 1br in a nice location with similar places going for $800-900.

I don't want to buy new (mostly because all the houses look the same), I want a florida mediterranian type place.

However, used houses are going for the same price as new only with less space, no warranty, etc.....

Everytime I look I hear the agent say "well your payment would be only about X dollars". It's not about the freaking payment, it's about value.

The one's that acknowledge this will explain that in 10 years it will be easily worth the asking price....again WTF do you buy at a future value?

 

[SagaLore]

Originally posted by: vi_edit

So if I plan on getting a nicer house in a few years, do I buy or rent?

If appreciation is slow(or non-existant), and you have a slow moving market, and you plan to buy a different house in a couple years, I would say that it would be unwise to buy another house(assuming you have little to no equity in your current one).

It just sounds like your housing market sucks. You'll have to get lowballed to sell your current house, then you have pay closing costs on the new one which is money in the whole, it sounds like your property value never really goes up in prices, and then you have to do the same thing all over again in a few years.

Bingo. That is the position I am in. Houses are going down in value in the area I'm at, and they take almost a year to sell.

So given my scenario, are you agreeing that renting is the way to go right now? I just talked to a friend of mine who is renting a 2 bedroom upper floor for $265 per month. She might be able to get us into the first floor at that rate since she knows the landlords... it's out in the country by itself, close to one of the highways, well water and septic...

 

[T2T III]

Including escrowed property taxes and insurance, our payments are just shy of $500 per month

For as cheap as your mortgage is, you could buy a pretty big fence so you'd never have to look at your sucky neighbors.

 

[SagaLore]

Originally posted by: Tiles2Tech

Including escrowed property taxes and insurance, our payments are just shy of $500 per month

For as cheap as your mortgage is, you could buy a pretty big fence so you'd never have to look at your sucky neighbors.

It's a shared drive and we already have a fence. Doesn't work. 🙁