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joshuatrio
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2011 Mar 4, 6:40am
My feeling is you should hunker up and sell the big house and live in the smaller house with the much smaller obligation. A master degree in libary sciense is useless as the 21st century library is called the internet and it’s not going back. But if you’re confident that you can make some money and find a job soon, don’t let anyone stop you from keeping the bigger home. I don’t think you have the financial stability to maintain two homes and make it through the housing upcycle to benefit from owning the rental.
2 bedroom and a den is big enough for a family of four, the proceed from the bigger home should be kept in the bank to hedge against interest rate risk. But the facts are so limited (at least look up the value of your 2009 property purchase) that I can’t advise correctly.
Agreed. Less debt it better. A small family can do just fine in a 2 bed. Don't worry about keeping up with the Joneses... Get rid of some of the stress, put a little cash in the bank, and find a job.
The problem is the OP has a fixed rate mortgage on the bigger house, and TWO variable rate mortgages on the smaller one. I would not dump the bigger house for the smaller one unless I could refi the smaller one into a fixed rate mortgage.
If the smaller house has a fixed rate mortgage on it, then keep the smaller house and sell the bigger one.
I hope you don’ t teach personal finance, or responsibility.
Ben Bernanke's house was underwater too.
He pumped Billions of dollars into the financial systems to keep the house bubble going, so he can sell his house to break even.
Instead, the food price doubled and tripled, and millions of people stave to death.
Sad but true.
THE SCHOOL TEACHER SAYS:
SF ace, sorry the 90k is at 3% and has been for years... the mortgage of 88k is at 5.6 or so. So on the small house two mortgages, the original still has 88k left--a total of 188k. house worth 225k or so.
I'm not sure how much the bigger house has depreciated. I assume 10% is prob close and we put 20% down...we live in the outskirts of where some would commute to NYC. So prices are high, for small space.
At the time, the rent mentioned by the agent for the small house would have more than covered the mortgages and paid a third of the new house. It sounded wonderful. Then in the future we'd own two houses. We had the first one paid down to 88k and it seemed like we had the ability. Times change.
stillrentinginLA
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2011 Mar 4, 1:58pm
I think the lesson learned here is “don’t listen to the VaJayJay†when it comes to financial decisions, specifically buying homes.
Right, cuz no man could be responsible for making a bad financial decision.
You're lame contributions to the conversation only prove that men can be stupid too.
RayAmerica
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2011 Mar 5, 12:16am
You’re a real estate expert…and there are 10 people who think they’re experts for every 1 that is.
Did you have any particular duck in mind?
bubblesitter
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2011 Mar 6, 5:34am
My condolences to your situation,
I love when people misuse words. Or maybe E-man really does support HELOC abusers and feels their deep grief and mental anguish. We should all start a fund for cjwest, for her great loss.
Its like a cult. Once you have a mortgage you are sympathetic toward other mortgage takers regardless of other different circumstances.
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Basically, we want our new larger house. It fits our family and we can afford if/when I have a job. BUT, I worry the "rental hose" loan could reset, making it cost more than rent pays. When rates go up it will too. Not sure the rate limit on that 90k...I should check.
At this point, MUST I sell the rental, to kill my exposure, or should I wait? If I don't find a new job and Refi fast to a low rate, the whole thing falls apart. I am getting depressed about the time it's taking to get a job....
Unemployed Schoolteacher in CT needs help–sell house now? Here’s the facts:
Owned a house (was 325k at height, now worth 225k to 235k-minus 5% selling fee)
The agent talked me into keeping the first house to rent, then buying the bigger house we needed. Now unemployed 6 months, this seems very risky.
Small house:
rents for $1400
Costs are 1200, 88k mortgage/taxes of $985/mo. Plus home equity loan 90k, 5.6% interest (variable rate!!!) currently $230/mo. , Also flood policy $85 mo, maintenance, lawn etc.)
total mortgages/insurance $1300 month + maintenance
Rent just covers this. The furnace and roof will go someday though. Rates could take the variable rate loan from $230/mo to 1k someday–I think? What if renters stop paying? What if rents fall in the area…
Selling it could net 40k, which would help until I can change careers or get a job. If I try to hold on to it and sell in a decade, it could risk the house we need. Will it even appreciate I wonder.
_______________________
Bigger house: paid 332k, put 70k down from taking home equity on small house. 30 yr. fixed 5 3/8% Mortgage of 264k= $2070 month–includes tax and insurance.
At this point, I’d sell either house? Spent 15k savings to keep both. I feel I must do something right away, before the 90k variable rate loan means I will be able to afford neither house. My kids need a house…
I keep hoping…If I can get a job, I could refi and use the tax break from the mortgage interest? Can recently unemployed people refi anymore? I may be underwater on the bigger one if values dropped about 20% in last 2 years? Any suggestions or help very welcome!!
#housing