“The Big Move” is a MarketWatch column that examines the ins and outs of real estate, from navigating to finding a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Want to know where your next move 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 town to split the land into a subdivision and let it through.
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 tax plus my mortgage, which combined is $ 2,500 a month.
I was offered a handsome sum to sell my home for $ 500,000 over two years ago. I had another house that I liked and was going to buy, so I wanted to sell. But the sale went through on my house, so I had to leave the house I wanted to buy.
There are no houses for sale now and I haven’t found anything I like. So I should rent until I find something. I should do it? Or just wait for other houses to come on the market and sell when I find something? I probably won’t get that much, but homes won’t be that expensive to buy either. Isn’t it all uniform?
It would be nice to spend money, go on vacation and not have to work so hard. But I also don’t want to get stuck in a rent paying as much as I was when I owned my home and be miserable because I’m renting to 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 nearing retirement and will have to sell. I still owe some money for my house and I won’t pay it before retirement unless I move.
Home ownership costs are rising rapidly across the country, so you’re not alone in feeling overwhelmed.
A recent study by real estate data firm Attom Data Solutions found that for the average family, owning a home was only accessible in 41 percent of counties nationwide. In other words, in the other 59 percent of the county’s counties, the average household would have to spend more than a third of their take-home pay on housing costs, including mortgage payments and property taxes.
Many sellers are in exactly the same boat as you. They would sell in the blink of an eye if they could find a house to buy. The inventory of homes for sale is at an all-time low and this is creating a kind of vicious circle. Home sellers are reluctant 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 save money, but it’s by no means certain. You don’t say where you live, but there’s a good chance it’s not much cheaper to rent. Indeed, rents in suburban and rural areas increased dramatically during the pandemic as families sought more space to live outside the big cities. A separate report from Attom Data Solutions found that owning a three-bedroom home (at the average home price) is cheaper than renting a three-bedroom home in nearly two-thirds of the country.
There are other downsides to renting, just to be sure. You have no control over your future housing costs, so while you may be able to afford the rent for the first year, there is nothing to stop the 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 cheaper than renting in nearly two-thirds of the United States, despite rising home prices.
With the rent, the money spent will not be returned to you. Even if you have lower monthly costs, a lot depends on what you do with those savings. Ideally, you should invest it or set it aside for a rainy day and not spend it.
You are not helpless, though. Given how low mortgage rates are still, even though they have risen in the past few weeks, I would suggest seeing if a refinance was right for you. But given how long you’ve been home and still working on paying off a mortgage, I assume you’ve refinanced a little recently.
You don’t say what you did after going to the local government to subdivide your land, but if it is there, I would consider selling it. Since you have a mortgage, however, this won’t necessarily be an easy process.
When land is divided, you must obtain written consent from the lender or mortgage lender underlying the property, said Tom Trott, a branch manager with Embrace Home Loans in Maryland.
“This requirement is in most mortgages and in the standard language of the Fannie Mae and Freddie Mac Trust Deed,” Trott said. To sell part of the property, you will need permission from your lender. But if it’s hard to get, you still have options.
“Assuming they weren’t able to get timely approval, another option would be to run the sale and refinance the remaining balance at the same time,” Trott said.