‘The Big Move’ is a MarketWatch column that looks at inscriptions and real estate, from navigating to looking for a new home to applying for a mortgage.
Have a question about buying or selling a home? Want to know where your next movement 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 went to the city to subdivide the land into subdivisions and passed.
I like where I live, but the house is getting old and the kids are gone. I am a 58 year old nurse. I pay $ 800 a month in property taxes plus my mortgage, which is a combined $ 2,500 a month.
I got a good enough sum to sell my house for $ 500,000 over two years ago. I had another house that I liked and had to buy, so I wanted to sell it. But the sale fell through on my house, so I had to walk away from the house I wanted to buy.
Now there are no houses for sale and I have not found anything I like. So I would have to rent until I find something. Should I do that? Or wait until more homes come on the market and sell when I find something? I probably won’t get that much but the houses won’t be as expensive to buy either. Isn’t it all even out?
It would be nice to spend money, go on vacation and not work so much. But I also didn’t want to be stuck paying rent as much as I was when I owned my house and be unhappy because I’m renting g in a place I don’t want to live.
I like my house where I live! But the property taxes are too expensive, and I am approaching retirement and will have to sell them. I still have money to pay on my house and I will not pay for it before retirement unless I move.
Home ownership costs are rising rapidly across the country, so there is no burden on yourself.
A recent study from property data firm Attom Data Solutions found that home ownership was only affordable in 41% of counties nationwide for the average household. That is, in the remaining 59% of counties across the county, the average household would spend more than a third of their takeaway pay on housing costs, including mortgage payments and property taxes.
There are many vendors in the same boat as you. They will sell a heartbeat – if they could buy a house to buy. The inventory of homes for sale is lower than ever, and a vicious cycle is proving that. Home sellers are reluctant to put their property on the market as there is hardly any guarantee that they will have a home when the sale is complete.
The rental may seem like a one-way ticket to savings, but that’s far from certain. You don’t say where you live, but there’s a good chance that’s not cheaper to rent. In fact, rents in suburban and rural areas have risen sharply in the midst of the pandemic as families seek more space to live outside major cities. A separate report from Attom Data Solutions found that a three-bedroom homeowner (at an average house price) is cheaper than renting a three-bedroom house across nearly two-thirds of the country.
There are other disadvantages to renting, to be sure. You have no control over your future housing costs, so while you may be able to pay the rent for the first year there is nothing to stop the landlord from picking it up when you go to renewal. With a house, you are building a valuable financial asset.
A recent study found that owning a home is still more affordable than renting across nearly two-thirds of the United States, despite rising house prices.
With rent, no money you spend comes back to you. Even if you have lower monthly expenses, a lot depends on what you do with those savings. Ideally, you’d invest or stash it for a rainy day, and you wouldn’t wear it.
You are not helpless, though. Given how low mortgage rates remain – although they have risen in recent weeks – I would advise you to see if refinancing was right for you. But given how long you’ve been in your home and the fact that you’re still working to pay off a mortgage, I’m going to assume that you’ve recently refinanced.
You do not say what you did after you went to your local government to subdivide your land, but if it is sitting there, I would consider selling it. However, having a mortgage does not have to be a straightforward process.
When land is subdivided, you must obtain the written consent of the mortgage lender or servicer underlying the property, said Tom Trott, branch manager with Embrace Home Loans in Maryland.
“This requirement is in most mortgages and the standard language in the deed of trust of Fannie Mae and Freddie Mac,” Trott said. To sell some of the property, you will need a lender’s permission. But if that’s hard to find, you still have options.
“Assuming they could not get timely approval, then another option would be to make the sale and refinance the remaining balance at the same time,” Trott said.