‘The Big Move’ is a column in MarketWatch that looks at the shortcomings of real estate, from navigating in search of a new home to applying for a mortgage.
Do you have questions about buying or selling a home? Want to know where your next move should be? Email Jacob Passy to TheBigMove@marketwatch.com.
I have lived in my house for 40 years. I live on 5.25 acres and have gone to the city to subdivide the land and let it pass.
I like where I live, but the house is getting old and the kids are gone. I am a 58 year old sister. I pay $ 800 a month in real estate taxes, plus a mortgage of $ 2,500 a month.
More than two years ago, I was offered a pretty good amount to sell my house for $ 500,000. I had another house that I liked and was going to buy, so I wanted to sell. But sales fell on my house, so I had to go to the house I wanted to buy.
There are no houses for sale now and I haven’t found anything I would like. So I should rent until I find something. Should I do that? Or just wait until more houses come on the market and are sold when I find something? I probably won’t get that much, but buying houses isn’t that expensive either. Isn’t all this harmonizing?
It would be nice to go out for money, go on vacation and not have to work as much. But I also don’t want to get stuck in rent as much as I was when I owned my house, and be unhappy because I’m renting a place where I don’t want to live.
I like my house where I live! But property taxes are just too expensive and I’m retiring and have to sell. I still owe my house and won’t pay it off before I retire if I don’t move.
The cost of home ownership is rising rapidly across the country, so you are not alone with the burden.
A recent study by real estate data firm Attom Data Solutions found that for the average household, owning a home nationwide was affordable in only 41% of counties. In other words, in the remaining 59% of the county’s counties, the average family should spend more than a third of their home salary on housing costs, including mortgages and property taxes.
Many sellers are in the exact same boat as you. They would sell in a heartbeat – if they could find a home to buy. The list of homes for sale is at a record low and this creates something of a vicious circle. Home sellers are reluctant to bring their property to market because there is hardly any guarantee that they will have living space at the end of the sale.
Renting may seem like a one-way ticket to savings, but it’s far from certain. You don’t say where you live, but there’s a decent chance that it’s all so much cheaper to rent. In fact, rents in suburban and rural areas have risen sharply during the pandemic as families have sought more housing outside of larger cities. A separate report from Attom Data Solutions found that owning a three-bedroom house (at the average home price) is cheaper than renting a three-bedroom home in almost two-thirds of countries.
There are definitely other disadvantages to renting. You have no control over your future housing costs, so while you can afford rent in the first year, there is nothing stopping the landlord from renewing it if you are going to renovate. And if you have a home, you build a valuable financial asset.
A recent study found that home ownership is still more affordable than renting in almost two-thirds of the United States, despite rising house prices.
If you rent, the money you spend will not be returned to you. Even if you have lower monthly costs, there are many benefits to what you do with those savings. Ideally, you would invest in it or keep it for a rainy day, not spend it.
However, you are not helpless. Given how low mortgage rates are still – although they have risen in recent weeks – I would suggest looking at whether refinancing was right for you. However, given how long you have been in your home and the fact that you are still working on paying your mortgage, I assume that you have refinanced somewhat recently.
You’re not saying what you did after you went to the local government to cut your land, but if it sat there, I’d consider selling it. Since you have a mortgage, it may not be an easy process.
If the land is divided into parts, you must obtain the written consent of the mortgage lender or administrator of the underlying mortgage, said Tom Trott, head of the Maryland Embrace Home Loan Branch.
“This requirement is in most mortgages and in the plain language of the Fannie Mae and Freddie Mac trust deed,” Trott said. You need the permission of your lender to sell part of the property. But if it’s hard to get, you still have options.
“Assuming they did not receive timely confirmation, there would be another option to make the sale and refinance the remaining balance at the same time,” Trott said.