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OP, our stories are kind of similar. The big difference is that our house was not upside down, we actually made alittle bit of money on it. I can see if we would have lost money, we might have stayed. It is so hard to know when to call it quits or stick it out.
My DH and I just sold our home in October of last year. We'd been there for 11 years and we could see the neighborhood turning. It is maybe going to get better, but we could not chance that it would get worse, and we saw an opportunity to get out, and we knew he had to take it.
Friends and family would ask if we thought about moving. You know, it was such a popular thing to do back then. My friends all did -(not out of that neighborhood), they just moved into nicer homes as their incomes rose. Our incomes rose too but we stayed put. We patiently stayed in our little house; meanwhile paid off our debt and have been squirreling and squirreling away money so we can buy our next house.
We have 2 dogs and 2 small children and are not the neatest of folk that we can keep a place clean enough for showings on the spot. So we moved a bunch of things in storage. Staged the house beautifully. Had it professionally cleaned, painted, and did a few repairs. Renting a small house in the meantime (it is 1200 sq feet, and yes, it is killing me). What I was not prepared for was how long it would take for our house to sell. Kept hearing the same feedback- "love the house, not the neighborhood."
It took 15 months and a price reduction of $10K. Personally, I think we should have been a little more agressive and priced it as low as we could stand in the first place.
So if you think you cannot rent it out (Understood. We are just not landlord types and the crappy renters were what was ruining the neighborhood in the first place), see if you could move out to a cheap place that you can get a 6 month lease. Or if you think you can do it, get a storage unit, clean, declutter, get kennels for the pets if you have showings and they are there. People won't care if the price is right. PRICE IT TO SELL.
All the best to you. Please, don't guess anymore, find a good Realtor who can tell you how much your home would sell for. You might think $90K, but they might show you higher comps.These low interest rates are so tempting, I know. I can't believe how much more house we can afford because instead of a 6.5%, we are at a 4.5%. Your amount might surprise you and make this alot more affordable than you thought. What are you doing with $2000-$2500 a month to "play with"? That is a lot of playing!
Thanks for the advice and well wishes. Wife and I have always lived like we made $20k combined (which we did for the first 5 year of our marriage) - now that we are 20 years into it and making over $100k, we still live frugally. Our "play" money is mostly just spent on things that most people these days slap on credit - some new camera equipment, a vacation, some sporting goods (I target shoot), or some birding optics. We like being able to pay cash for anything we want whenever we need it, but don't go overboard on anything. Wife works from home, which saves us a ton in gas, clothing, etc. When I say our current vehicles will last us 10 years, I mean it - car is 4 years old and has 22,000 miles on it - I used to put that many miles in 10 months on a car!
Our plan right now is to save even more cash as our hobbies and vacations are going on pause - I had my once-in-a-lifetime safari to Africa 2 years ago and no plans on repeating for a long time. Wife is very frugal and never spends money on herself. My other hobbies are well-funded now and not in need of any more investment. It will be fun to see how much we can save in the next 6 months. We're going to start looking and if we see the "perfect" home we'll make a low-ball offer and see what happens - if it works out, we'll get the loan, make a big downpayment, but keep enough in reserve just in case. We'll move into it, totally spruce up the old house with paint, trim, some new cheap carpet and flooring, and turn loose the realtor - no worries about showings. We'll NOT rent out unless the house is on the market longer than 12 months, and even then we'll probably just lower the price - better to take a loss than be landlords.
Quote:
Originally Posted by did0c
OP, our stories are kind of similar. The big difference is that our house was not upside down, we actually made alittle bit of money on it. I can see if we would have lost money, we might have stayed. It is so hard to know when to call it quits or stick it out.
My DH and I just sold our home in October of last year. We'd been there for 11 years and we could see the neighborhood turning. It is maybe going to get better, but we could not chance that it would get worse, and we saw an opportunity to get out, and we knew he had to take it.
Friends and family would ask if we thought about moving. You know, it was such a popular thing to do back then. My friends all did -(not out of that neighborhood), they just moved into nicer homes as their incomes rose. Our incomes rose too but we stayed put. We patiently stayed in our little house; meanwhile paid off our debt and have been squirreling and squirreling away money so we can buy our next house.
We have 2 dogs and 2 small children and are not the neatest of folk that we can keep a place clean enough for showings on the spot. So we moved a bunch of things in storage. Staged the house beautifully. Had it professionally cleaned, painted, and did a few repairs. Renting a small house in the meantime (it is 1200 sq feet, and yes, it is killing me). What I was not prepared for was how long it would take for our house to sell. Kept hearing the same feedback- "love the house, not the neighborhood."
It took 15 months and a price reduction of $10K. Personally, I think we should have been a little more agressive and priced it as low as we could stand in the first place.
So if you think you cannot rent it out (Understood. We are just not landlord types and the crappy renters were what was ruining the neighborhood in the first place), see if you could move out to a cheap place that you can get a 6 month lease. Or if you think you can do it, get a storage unit, clean, declutter, get kennels for the pets if you have showings and they are there. People won't care if the price is right. PRICE IT TO SELL.
All the best to you. Please, don't guess anymore, find a good Realtor who can tell you how much your home would sell for. You might think $90K, but they might show you higher comps.These low interest rates are so tempting, I know. I can't believe how much more house we can afford because instead of a 6.5%, we are at a 4.5%. Your amount might surprise you and make this alot more affordable than you thought. What are you doing with $2000-$2500 a month to "play with"? That is a lot of playing!
You may want to go ahead and talk to a lender to see if your plan is even feasible. Some aren't lending for second homes unless you have minimum 30% equity in your old home (buy and bail comes to mind). Just saying it would stink if you made an offer and couldn't get financed for a second home, no matter how much you make...
Wow, what an interesting read. I'm from Ohio and have been working on finding a bigger home for many years. We need more land for 2 boys, 2 dogs, 4 cats, 2 goats and 3 horses. I've decided it will be next to impossible to do quick showing, Camper & horse trailer and all of the rest of our belongs has made this 1 acre home seem small at first glance but once all of our stuff is out it will look huge in comparision. I came to the conclusion last winter that if a place came up that had more land and 1 story we would go for it even if we didn't have a buyer for ours. Well last April a place came up as a short sale, and we decided to go for it. We are all preapproved for our loan even though we still owe on our current home. The Short sale has been a huge headache to say the least and it is now almost a year later. The realitor is confident the sale will go thru but it will take probably another 60 days. So this short sale hassel will be a year long process and then some before its all said and done. It is not practical at all for us to try to empty the current house and try to sell so we are taking the gamble and praying for the best. We have it up forsale by owner currently, but everyone wants to Rent to own. I have no interest in Renting or being a landlord unless I absolutely have too. I have packed up as much as I could and packed our camper full of things to thin the house out but I still feel it will need to be empty or darn near before its sells and have saved about 10 months worth of payments(incase). I sure hope it does its a great location, low maintance and many important updates.
The one good thing about this short sale it has given me time to pack alittle at a time and thin things out so once it is closer to closing I can pack up more and then I will hold an open house thinking that will be a start and better than random showings. Esp. since the ones I have shown it too, ask to do land contract after all the stress I went thru to prepare to show it and then they are no shows or waste my time knowing they needed a rent to own deal anyway.
The tax issues mentioned if renting out and such are something I'm glad I read I didn't realize it would change.
I am curious of what the worst case senerio (besides renting) would be? If we get behind on the "old" mortgage could they take both homes away from us? Totally won't let this happen but who knows what life could throw at us.
I've also heard that there are some special loans you can get while trying to sell, but haven't gotten any concrete info. Are any of you familiar with this?
Its all a very stressfull process but if we don't make a move were afraid it will take another 10 years to find a place to fit our needs in this school distrct.
Best wishes to you all ~
Well, we ended up finding and buying a great home on a lake with 1.5 acres, great location close to work. House would have cost over $300k back in 2006. We have spent a year and a half renovating the other house (we took our time and were in no rush) and put it up for rental a few weeks ago. We would have taken at least a $20,000 hit or more if we had sold it - the idea of selling the house and at closing having to cough up $20,000+ was right out! We found a perfect renter who signed a 1 year lease and seems to be an awesome person. We even have hopes of someday being able to sell her the home (her daughter told me that she wants to buy her mom a home someday and if she really likes our place that she is renting she will do so in a year or two!)
So, things so far have worked out well - it was tough getting the loan for the new house, though, even with our credit, 20% down, etc.
Wife and I make about $105k a year. Currently live in a small home on .18 acre - built in 1969, 1300 sq. feet, concrete block construction (read: no insulation in walls) - this is in the Pasco county area of Florida, mostly older homes, cookie-cutter 60s-70s retirement homes. Surrounded by a "meh" neighborhood of roughly 50% rentals. Starting to notice a degradation in the demographics. We have some good neighbors, but get a lot of trouble and noise from renters right behind us (constant problem, doesn't change with new renters). There's no way to improve that situation, or our energy efficiency. Bought house at height of market for $135k, have put about $10k of improvements into it, but if I were to guess at a reasonable value for it now it would be around $90k or less. We currently owe $100k on it. Mortgage is in my name only.
Lately we've been giving some thought to moving. We've found some homes in the area that have over 1/2 acre, are very secluded (read: lots of other homes in area that are at least 1/2 acre, lots of trees, conservation areas, only one street in or out of subdivision, etc.) - Prices are around $140k-$200k.
Now, our current mortgage is $750 a month with taxes and insurance. We have NO debt - both cars are newer and paid for with no replacements on the horizon for at least 5 years. Other than the occasional gun, optic, or vacation we have no other big expenditures. Our monthly outlay for retirement investing, food, gas, mortgage, insurance, utilities, etc leaves us with about $2000-$2500 a month to play with.
Given all that, I'm wondering if now may be the time to look into buying a newer, nicer home with more land and in a better neighborhood. Currently have about $40,000 in savings. We had planned on just paying this current house off in 3 years, but now I'm thinking instead of paying extra towards principal and then paying off a huge chunk at the end of 3 years, maybe we should shop for and buy another home, move out, clean up and spruce up this one, and then put it on the market.
Question is - good time to do it? Even with a mortgage payment of $1300 or so, we'd easily be able to do this with our current income and outlays.
I guess I'm just worried about getting the mortgage - since the current mortgage is only in my name, could we get the newer one in my wife's name? Both of us have credit scores in the 800 range, and obviously have a very low debt-to-income range. Being able to put at least 20% down would also probably help. I hate the idea of having two mortgages, as well as the possibility of renting out the other home if we can't sell, but on the flip side I just have to wonder if the current pirces of homes and low interest rates are going to last much longer, as well as our ability to get the second mortgage for another home.
No need to just use your wife for qualifying on the new one. The loan for the new house can be in both your names.
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