“The Big Move” is a MarketWatch column that covers the ins and outs of real estate, from finding a new home to applying for a mortgage.
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 been living in my house for 40 years. I live on 5.25 acres and went to town to divide the land into subdivisions and told him to move on.
I like the place 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 tax plus my mortgage for $ 2,500 a month.
I was offered a nice sum to sell my home for $ 500,000 more than two years ago. I had another house that I liked and was going to buy it, so I wanted to sell it. But sales fell on my home, so I had to walk away from the home I wanted to buy.
Now there are no houses for sale and I haven’t found anything I like. So I would have to rent until I find something. Should I do this? Or just wait for more houses to hit the market and sell when I find something? I probably won’t get that much, but the houses won’t be that expensive to buy either. Doesn’t it all align?
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 the rent paying the same as when I owned the house and be unhappy because I’m renting g in 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 nearing retirement and will have to sell. I still owe money for my house and will not pay it back until retirement unless I move.
The cost of owning a home is rising rapidly nationwide, so you are not alone on a burden.
A recent study by real estate data company Attom Data Solutions found that for the average household, home ownership was only available in 41% of counties nationwide. In other words, in the remaining 59% of counties across the county, the average family would have to spend more than a third of their home earnings on housing, including mortgage payments and property taxes.
Many sellers are in the same boat as you. They would sell in the blink of an eye – if they could find a house to buy. The number of homes for sale is at a record low, and this creates a sort of vicious circle. Home sellers are hesitant to bring their properties to market as there is almost no guarantee they will have a place to live after the sale is complete.
Renting may seem like a one-way ticket to savings, but it’s not certain. You don’t say where you live, but there’s a good chance that not everything is cheaper to rent. In fact, rents in suburban and rural areas increased sharply in the wake of the pandemic, as families looked for more space to live outside of the big cities. A separate report by Attom Data Solutions found that owning a three-bedroom home (at the average price of a home) is cheaper than renting a three-bedroom home in almost two-thirds of the country.
There are definitely other downsides to renting. You have no control over the future cost of the apartment, so while you may be able to afford the rent for the first year, nothing will stop the landlord from picking it up when you go to refurbish. And when you own a home, you are building towards a valuable financial resource.
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A recent study found that home ownership is still cheaper than renting in nearly two-thirds of the United States, despite rising home prices.
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Thanks to the loan, no money you spend comes back to you. Even if you have lower monthly costs, a lot depends on what you do with these savings. It would be best to invest it or put it away on a rainy day and not spend it.
However, you are not helpless. Considering how low mortgage rates remain – even though they have risen in recent weeks – I suggest you check if refinancing is right for you. But considering how long you’ve been home and the fact that you’re still working on paying off your mortgage, I assume you’ve recently refinanced your loan.
You don’t say what you did after you went to your local council to divide your land, but if it were there I would consider selling it. However, since you have a mortgage, it won’t necessarily be a straightforward process.
When the land is divided, you must obtain written approval from the lender or mortgage servicer on which the property is based, said Tom Trott, branch manager at Embrace Home Loans, Maryland.
“This requirement is found in most mortgage loans and is standard language in the Fannie Mae and Freddie Mac Trust Deed,” said Trott. You will need the lender’s approval to sell part of the property. But if it’s hard to come by, you still have options.
“Assuming they don’t get approval in time, another option would be to sell and refinance the remaining balance at the same time,” said Trott.
