‘The Big Move’ is a MarketWatch column that looks in and out of properties, from navigating the search for 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 will be? Email Jacob Passy at 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 divide the land into a subdivision and get it passed.
I like where I live, but the house is getting old and the kids are gone. I’m a 58 year old nurse. I pay $ 800 a month in property taxes plus my mortgage, which totals $ 2,500 a month.
I was offered a pretty good amount to sell my house for $ 500,000 more than two years ago. I had another house I liked and was going to buy, so I wanted to sell. But sales fell 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 had to rent until I found something. Shall I do it? Or just wait until more houses come on the market and sell when I find something? I probably do not get much, but the houses will not be so expensive to buy either. Doesn’t it all work out?
It would be nice to spend money, travel on vacation and not have to work so much. But I also do not want to be stuck in a rent that pays as much as I was when I owned my house and be unhappy because I rent a place I do not want to live.
I like my house where I live! But the property tax is too expensive, and I am approaching retirement and have to sell. I still owe money on my house and will not pay it before retirement unless I move.
The cost of homeowners is increasing rapidly across the country, so you are not alone in feeling burdened.
A recent study by real estate data company Attom Data Solutions found that owning a home was only affordable for 41% of counties across the country for the average household. In other words, in the other 59% of counties across the county, the average family will need to spend more than a third of their home wage on housing expenses, including mortgages and property taxes.
Many sellers are in the exact same boat as you. They would sell with a heartbeat – if they could find a home to buy. The stock of houses for sale is at a record low, and that creates something of a vicious circle. Home sellers are reluctant to market their properties because there is hardly any guarantee that they will have a place to live when the sale is complete.
Renting may seem like a one-way ticket to savings, but it is far from certain. You do not say where you live, but there is a decent chance that it is not that much cheaper to rent. In fact, rental prices in suburban and rural areas have risen sharply amid the pandemic as families have sought more space to live outside major cities. A separate report from Attom Data Solutions found that owning a three-bedroom house (at the median home price) is cheaper than renting a three-bedroom home over almost two-thirds of the country.
There are other disadvantages to renting, to be sure. You have no control over your future housing expenses, so even though you may be able to afford the rent for the first year, there is nothing to stop the landlord from breaking it when you need to renew. And when you own a home, you are building on 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 house prices.
When you rent, the money you spend does not come back to you. Even if you have lower monthly costs, a lot runs on what you do with these savings. Ideally, you would invest it or stash it for a rainy day and not use it.
You are not helpless. Given how low mortgage rates still are – even though they have risen in recent weeks, I suggest you see if a refinance was right for you. But given how long you have been at home and the fact that you are still working to pay down a mortgage, I would assume that you have refinanced something recently.
You do not say what you did after you went to your municipality to divide your land, but if it is there, I will consider selling it. But because you have a mortgage loan, this will not necessarily be an easy process.
Once the land is subdivided, you must obtain the written consent of the lender or valet of the mortgage underlying the property, said Tom Trott, a department manager at Embrace Home Loans in Maryland.
“This requirement is in most mortgages and standard languages in the Fannie Mae and Freddie Mac Trust Act,” Trott said. To sell part of the property, you need the lender’s permission. But if it’s hard to come by, you still have options.
“Assuming they could not get an approval in time, another option would be to execute the sale and refinance the remaining balance at the same time,” Trott said.