“The Big Move” is a MarketWatch column that explores the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Do you want to know where your next step should be? Email Jacob Passy at TheBigMove@marketwatch.com.
I have lived in my house for 40 years. I live on 5.25 acres, and I went to the city to subdivide the land into a subdivision and had it approved.
I like where I live, but the house is getting old and the children are gone. I am a 58 year old nurse. I pay $ 800 a month in property taxes plus my mortgage, which together is $ 2,500 a month.
I was offered a pretty good sum to sell my house for $ 500,000 over two years ago. I had another house that I liked and I was going to buy it, so I wanted to sell it. But the sale of my house did not go through, so I had to move away from the house I wanted to buy.
Now there are no houses for sale and I haven’t found anything I like. Then he would have to rent until he found something. Should I do that? Or just wait until more houses appear on the market and sell them when you find something? I probably won’t get that much, but the houses won’t be that expensive to buy either. Isn’t everything even?
It would be nice to spend money, go on vacation and not have to work so much. But I also don’t want to get stuck in rent paying as much as when I owned my home and be unhappy because I’m renting g somewhere I don’t want to live.
I like my house where I live! But property taxes are too expensive, I’m getting close to retirement and will have to sell. I still owe money on my house and I won’t pay it off before retirement unless I move.
Homeownership costs are rising rapidly across the country, so you’re not the only one feeling burdened.
A recent study by real estate data firm Attom Data Solutions found that for the average home, owning a home was only affordable in 41% of counties nationwide. In other words, in the other 59% of counties across the county, the average family would need to spend more than a third of their take-home pay on housing expenses, including mortgage payments and property taxes.
Many salespeople are in the exact same boat as you. They would sell in a heartbeat, if they could find a house to buy. The inventory of homes for sale is at an all-time low and that’s creating a kind of vicious cycle. Home sellers are hesitant to put their properties on the market because there is almost no guarantee that they will have a place to live once the sale is complete.
Renting may seem like a one-way ticket to savings, but that’s far from certain. It doesn’t say where you live, but there’s a good chance it won’t be much cheaper to rent. In fact, rents in suburban and rural areas have risen dramatically amid the pandemic, as families have sought more living space outside of major cities. A separate report from Attom Data Solutions found that owning a three-bedroom home (at median house prices) is cheaper than renting a three-bedroom home in nearly two-thirds of the country.
There are other downsides to renting, no doubt. You have no control over future home costs, so while you may be able to pay your rent for the first year, there’s nothing stopping your landlord from raising it when you go to renovate. And when you own a home, you are building a valuable financial asset.
A recent study found that owning a home is still more affordable than renting in nearly two-thirds of the US, despite rising home prices.
With rent, the money you spend is not returned to you. Even if you have lower monthly costs, a lot depends on what you do with those savings. Ideally, you would invest it or save it for a rainy day, and not spend it.
However, you are not helpless. Given how low mortgage rates remain, despite the fact that they have risen in recent weeks, I suggest that you see if a refinance is right for you. But given how long you’ve been at your home and the fact that you’re still working to pay off a mortgage, I assume you’ve refinanced recently.
He doesn’t say what he did after going to his local government to subdivide his land, but if it’s there, he would consider selling it. However, because you have a mortgage, this will not necessarily be a straightforward process.
When land is subdivided, you must obtain the written consent of the lender or servicer of the mortgage underlying the property, said Tom Trott, Embrace Home Loans Maryland branch manager.
“This requirement is in most mortgages and in standard language in the deed of trust for Fannie Mae and Freddie Mac,” Trott said. To sell a part of the property, you will need the permission of your lender. But if that’s hard to come by, you still have options.
“Assuming they couldn’t get timely approval, then another option would be to go through the sale and refinance the remaining balance at the same time,” Trott said.