Ask the Readers: Should I Sell My Home to Pay Off My Debt?
Published on - August 13th, 2010 (by J.D. Roth) Yesterday we had a great discussion about some of the financial choices I’m facing, but today it’s time to look at a decision a GRS reader is trying to make. Catherine wrote to ask if it makes sense to sell her home so that she can become debt-free and have the freedom to pursue a simpler life:
I’m in my mid-forties, self-employed in a high-cost city where I live in a one-bedroom condo that I bought ten years ago. I have about $220,000 in equity in the condo (and about $132,000 left on the mortgage).
My mortgage is very affordable because I refinanced into a 30-year loan last year. Still, housing costs eat up about $1500 a month (and would be $400 more if not for the refinance). If I rented, I’d probably spend about that much for an apartment. As part of my housing costs, I pay over $500 each month toward the homeowners association, and there are a number of expensive building renovations looming on the horizon.
I haven’t been putting more money towards the mortgage because now I’m obsessed with thoughts of selling my apartment and renting to give me more flexibility in pursuing a less stressful life. (My dream includes a small house in a lower-cost city, having a garden, etc.) I make a decent living, but I don’t love what I do. On the other hand, I have no idea what I’d do if I switched careers.
Other than my mortgage, I have:
- $2,000 in credit-card debt
- $14,000 owed on a home-equity line of credit
- Nearly $300,000 in retirement and investment accounts
- $10,000 in an emergency fund and another $1500 in savings
If I sold the condo, I could pay off my debt, pocket a good chunk of change, and have more time to think about what I want to do with my life. Is it crazy to sell my home when I don’t have my plans mapped out yet? It would be such a relief not to worry about the ever increasing condo fees and the repairs I’ll need to make soon…
When I first read Catherine’s e-mail, I thought she was asking whether she should sell her home to pay off her debt. But that’s just a part of what’s going on here. Catherine has $300,000 in retirement savings, $220,000 in home equity, and almost $12,000 in savings accounts. That’s about $532,000 in assets to just $148,000 in liabilities. Not bad.
Still, I’d be cautious about rushing into anything. While I absolutely think Catherine should explore new careers, I think she should be patient as she does so. Here’s my advice:
- Don’t make any sudden decisions. Take small steps, and test-drive choices. First, Catherine needs to decide what her long-term goals are. This can be tough. If she doesn’t know what she wants to do ten years from now, she should do some self-reflection: Take time to see a career counselor, somebody who can guide you through your journey. (My friend Michael — the man who inspired Get Rich Slowly — has helped both me and Kris on our own career journeys. He’s just started a career counseling blog.)
- Consider the long-term housing market. Catherine could sell, but she should be aware that many experts expect home prices to recover some of their losses over the next few years. (Some of their losses, not all.) By waiting 24 or 36 months — during which time she could research potential futures — Catherine may find that she’s able to get even more for her house. (Plus, if she’s diligent, she may be able to pay off her $16,000 in debt.)
- Don’t rent — not yet. Catherine says that if she rented in her city, she’d probably pay about the same as her mortgage. But when she pays her mortgage, she’s building additional equity in her home, something that renting wouldn’t give her. I’m not a “you must own a home!” zealot — if fact, I think renting can be a great choice — but in this situation, I think Catherine is best served by staying in the house until she’s made a definite decision to live elsewhere.
The more I think about it, the less this is a personal-finance question, and the more it’s a question about personal values. It’s yet another example of how money is more about mind than it is about math; no economist has yet constructed an equation that accounts for the decisions Catherine has to make!
Have you ever faced a choice like this? (Or do you know somebody who has?) What would you do if you were in a ho-hum job in a house you didn’t care for, and had the opportunity to try something new? Should Catherine take a risk — make a leap of faith, sell her home, and move somewhere else? Should she just bite the bullet, stick with her job, and keep at what she’s doing until she retires? What other options should she consider?
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Take it from me, downsizing your home is a great feeling and would recommend it to anyone. Property is taking a long time to sell, so you will have many months if you need time to think on your career objectives while selling your property. It is a tough market out there especially now that the tax credits have ended, you may find out it is going to be tough to sell.
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If your job is mobile (meaning if you move, your salary won’t be majorly impacted by losing local customers and having to find new ones), then put the house on the market today and start thinking about where you want to live ASAP. Once you get to your new city, if you still hate your job, find a new one.
If your job isn’t mobile, or if it’s really driving you crazy, then figure out where you want to live and actively pursue a different job there. When the right one comes along, then consider selling and getting out of your current situation.
In other words, don’t cut your current income without a plan.
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Wow, this is a real toughie. I would say JD is about right, and if it were me, I would stick around unless I had a very firm idea of where I wanted to go and what else I wanted to do.
My family is in a similar position, although we are renters. We live in New York City, and would like to buy a modest condo in part because prices have come down (a little – no crash here) and we are expecting a child. We cannot afford to rent a 2-bedroom apartment, as the median 2-bedroom rents for $4300k – a month.
I don’t see prices coming down much further, and yet we hesitate because theoretically we *could* move to a cheaper city and have a tiny mortgage – our savings would go very far there. My job is, of course, portable, but my husband’s is not. The dilemma is fairly paralyzing, and we have not made any offers on apartments because of this.
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Is there anywhere near where you live where you could go on a quiet weekend or weeklong retreat? It is very helpful to get away from the noise we live in have time to really think, really listen to what we need. About three years ago I started to feel the itch that I was not living the life I wanted. Too stressful a job, not enough time for family, really hated what I was doing for a living. I didn’t quit right away, but it was the impetus for me to start researching what my exit strategy would be and what I would do on the other side. I started paying down as much debt as I could and saving as much money as possible. I even took a hellish promotion knowing it would only be for a year or so and would give me the opportunity to sock away even more money. I started taking classes in my real interests and found a real groove and happiness, opportunities and contacts opening up. Then I quit my job, knowing I had a financial cushion for about a year or so. Am very happy. I am renting right now and perfectly happy with that. Who needs the stress of owning right now? Not me. My priorities were to put myself in a good place to launch a new career/lifestyle and I am so happy I did it. Life is short. Don’t waste it on worrying about having stuff. Make the most of it. You will feel finally alive.
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I don’t see why you have such a high emergency fund with debts like you have. I would take all but $1-2K out of the emergency fund and the $1500 out of savings to put toward debt repayment. Then I would work toward paying the debt as quickly as you can. THEN, when you are already debt free, have built more equity on the condo, have built up your emergency fund again, AND have had time to think about life, make the decision whether you want to sell or not. And who knows, maybe your condo will be worth more then. I’d say that’s a win all around.
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Wow! this sounds like Suze Orman, can I afford it?
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I hope I’m not repeating someone else’s idea ( I haven’t read all the responses yet) but I wanted to get this idea down before I forgot it.
Make a lateral move and sell the condo for another one that costs exactly the same as your present condo but that does not have upcoming repair costs, maybe something newer. Pay off all your debt with the equity from the first condo, stretch out your new mortgage to 30 years or so making the payments nice and low, giving you stress free time to think while you decide on your bigger goals. This of course assumes that you have no problem selling your condo, you didn’t mention that that would be a problem so I’m guessing you can.
This leaves you with no extra debt, low payments and you are still paying some down on a new mortgage and maybe prices could even go up by the time you sell.
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If rent and mortgage are about the same, and she has no immediate plans to move, I’d keep the house. It may take some time for her to figure out what she’d really like to do, and when that happens THEN she can put the house on the market.
Rents may be similar to condo costs NOW but rents increase every year, most of the time. The mortgage payments don’t go up with inflation. So if she sells and ends up renting for a number of years, she could end up paying more.
Besides that, waiting allows the housing market to recover, and it might lead to a better price on the condo. The condo market is pretty depressed right now.
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It seems to me that the real question is: “How badly does Catherine want to move?” The answer I see is that she very much wants to move and make a significant life change.
She’s got a large net worth and can generate a large amount of cash by selling. She can move to a lower cost, lower stress area. Yes, her condo may (or may not) make significant gains in the next few years, but which would you rather have $10-20k or 2+ years of extra happiness? I know which one I’d pick.
I say go for it as long as you don’t have to sell the condo for a ridiculously low price. Even if she moves and doesn’t like it, she can always move back.
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Also remember condo fees are paying for stuff you might have to pay on your own if you rent. My condo fee covers hot water, garbage pick up, home insurance for the outside and structure of the building, snow removal and landscaping among other things. Mine is 178$/month though so I’m guessing you live in a high rise with expensive elevator repairs? Or maybe the condo board had bad investment vehicles for their money. The financial stability of the condo board accounts is something I would have never known to think about when I bought my place. For the person saying to buy a new condo that doesn’t need repairs, it is hard to predict if a place is going to need repairs that the board will fund with a special assessment. My board is really good about timing the upgrades and repairs over a period of time so that we don’t have to do assessments (so far). Depending on how much her assessment will be the closing costs alone may be higher.
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Thinking about your life, job, home is good.
If possible I’d sell! I think the housing market will be low for years. Likely can even rent a similar condo for less than you currently pay. Additionally, if your life changes you can move in 12 months when the lease is done. New town, new neighborhood, different view out the windows. People would Love to have you as a renter. Good credit, prompt pay etc. They will keep rent low to keep a person like you.
I’ve always loved owning my own home, but the true cost of that ownership was very high. Tax write off not really a winner if you run All the numbers. A nice rental house or apt. can be very comfortable and allow you much freedom.
Great topic!
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@ chacha1: “El Cheapo’s analysis of the assets/liabilities is off, too. 132K in mortgage debt is not an asset.”
No, El Cheapo got it right. Her condo is the asset (not the condo equity), and her condo value is currently made up of $220K in equity and $132K still mortgaged, for a total condo value of $352K. So her N.W. balance sheet would look like this:
Assets = $352K condo + $300K retirement + $12K cash savings = $664K
Liabilities = $132K mortgage + $14K HELOC + $2K cc = $148K
Net Worth = Assets – Liabilities = $664K – $148K = $516K
JD essentially counted the mortgage balance twice in his numbers, by only including the condo equity in her assets (which already takes the mortgage balance into account) and then including the mortgage balance again in her liabilities.
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I have to disagree with JD here. Sell the condo. You’re paying $500 per month to the condo association that you’ll never see again. Your mortgage on the condo is $1500. You expect to pay $1500 to rent. This means you’ll still have an extra $500 per month (the current condo fee) which you can aggressively save towards paying cash for a house.
Different individuals might need to make different choices in this circumstance. But you are obviously eager to payoff your debt and it also seems that you will soon be moving anyway. If it makes you more comfortable and you achieve greater personal fulfillment from paying off the debts now, then by all means, do so!
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As a GRS reader with no financial authority I would wait to sell the condo since it costs as much as renting. Explore career interests first. Hopefully, once you find a new career choice you can sell your condo for a little house with a garden. Also, consider taking a little weekend retreat to an area you’re interested in living. Maybe it would clear your head.
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@ Daniel – She is not paying $1500 for her mortgage. She is paying $1500 for her *housing costs* which she says includes the $500 to her condo association. Therefore, she breaks even paying $1500 in rent, but builds no equity. She does not gain $500 in cash flow by renting.
I am estimating that her housing payment breakdown is approximately $700 principle+interest, $300 in real estate taxes, and $500 for her condo association (which includes her homeowners insurance).
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I think taking the step toward exploring your career and life choices that come with it, will help unlock the answer.
You’ve got assets/savings/equity, which is better than most; (2) you have an income — better than many in this economy; and (3), you are thinking of a career/life change. Based on your question, if I had the first two going for me, I would say spend the time first to figure out the career step first.
But note — exploration may come at a cost. School or a trade, or simply having to carry two jobs at once — one that sustains you and other to nourish your soul — means that you have to be willing to spend the time and energy to focus on this.
But, interestingly enough, if you are committed to finding out, once you come closer to that career answer, and potentially who you are, you’ll not only know pretty much what you want to do, but *where* you want to be when you do it.
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I’m sensing a cash flow problem here. Why else would there be the credit card and HELOC debt so soon after refinancing? What did you use those funds for? (Just theorizing here) if it was because you were feeling twitchy and needed vacations or a new car, then I think you need to be really careful here or you could end up making another bad decision for fear of sitting still. If on the other hand you blew up the HELOC to pay off old student loans or to help out your family or similar, then that may be a different situation.
Is ‘the simple life’ something that looks good from your seat now, or is it something that you know you could live, because you’ve been practicing it and working to downsize all along?
I know I get the itch every few years, and have to work hard with yoga and retreats and deep thinking on what it is that I’m really after.
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It sounds like emotionally, she wants to move. Having been hit this year with $15,000 in special assessment condo fees, I feel her anxiety, but I would spend some time really analyzing and exploring what she wants to do before taking the action of selling her condo.
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$500/month on maintenance fees comes out to about 1.7% of her home value. This isn’t an terribly outrageous % IF this includes some utilities and/or amenities (gym, pool, undergroud parking, etc.). The average single family homeowner should expect to spend 1.5-2%/year on maintenance.
My only advice re: the possible relocation and career change would be to search out people who have made a similar change recently and ask them if it was all they expected. I think there is at least one poster above who mentioned feeling very positive about downsizing and being mortgage free.
If anyone has read the book “Stumbling on Happiness”, a vast amount of research has suggested that the only reliable way to predict if something will make us happy is to ask someone who has made the change. In a nutshell: Since our view or the past (and even the present) is wholly subjective and biased, we are very limited in our ability to predict our future feelings.
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In selling the condo, wouldn’t she have to disclose the upcoming assessment? I wonder how that would factor into the sale.
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Wow! Sell!! and do what you want. Give yourself some rules to remain in a fininicial safe zone, then go for the adventure. If you wait too long you may never. so many excuses, you will not have the time, my health prohibits my desires or you are just plain tired and lose your ambition. Life is to live and dream.. and it is so very short. Take care and have some fun!
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It’s hard to do even a back-of-the-napkin calculation without solid numbers, but assuming an equivilent apartment would actually rent for $1500, that puts the fundamental value of the condo between $225,000 and 270,000. It’s highly unlikely this is the bottom of the market in your area, just based on the numbers you’ve given. If you can sell for $350,000, I think you should. If you think you’re going to sell in the next couple of years anyway, better to do it sooner than later.
I also think you should sell from a non-financial perspective. It sounds like your home is causing you stress. It shouldn’t. That’s supposed to be one of the benefits of owning your home, the feeling of security it brings that you can’t be kicked out with no notice. It sounds to me like your house feels like an anchor rather than a sanctuary. So, cut the chain. $200,000 in the bank and an optimistic attitude will carry you a long way.
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Sounds like the author’s dream is in sync with what makes sense financially.
What a perfect match.
I say do it!
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I don’t see a strong reason to not sell, nor a strong reason to sell.
If she wants to move then I don’t see any major reason to stay in that condo. SHe has $220k equity in that condo which is a lot of money. I don’t see any reason to expect high appreciation in the short term and she’s spending a lot to live in that condo and would probably do better renting. If she wasn’t in such a high cost of living area then buying might make a lot more sense.
If she has a sense she is going to move then maybe she should stop and think about what her plans really are. She might talk to a REaltor and look at putting the house on the market. It is possible it could take many months to sell.
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Sounds to me like this is so much more about life than about finances. The finances we can control (to some degree or another). Whereas the life issues…not quite as easy.
Perhaps give yourself a timeframe – like 6 months. Agree to stay in the condo for 6 more months without even contemplating selling or the upcoming assessments or whatever. (Hell, you have enough equity in the place that you could pay the future assessments for a buyer and *still* buy a house in a less expensive city.)
Then begin to focus on your direction in life. What you want to do & who you want to be.
I’m guessing that if you can make this kind of agreement with yourself, you’d find a bit more clarity. Because right now you’re trying to control the numbers, because it’s so much easier to run the numbers than to figure out where we’re going in life.
(Ask me how I know? I really recognized myself in this person!)
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I agree with JD’s assessment for the most part. The part I don’t agree with is I don’t think the housing market will get better. I don’t care what the cheerleaders are saying, the analysis just doesn’t prove it to be so.
I think we have a few more yrs of falling equity. So selling now might make sense, rent a few yrs and then buy when the market hits its lowest.
I know this isn’t what people want to hear but a rise in RE in the near future is a pipe dream not reality.
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This is a tough choice. I agree with many of the comments that you need to further assess your plans. Without a concrete idea of what you will do once you sell the condo you might find yourself in a similar “ho-hum” situation when it is all said and done.
“It would be such a relief not to worry about the ever increasing condo fees and the repairs I’ll need to make soon”
If this helps you make a decision about your future sooner I say do it. Renting for now, being debt-free, so you can concentrate on a new and exciting career, in a lower-cost-of-living-area (where you can finish up your retirement savings goals) is probably your best bet as condos are notorious for their high maintenance fees. You would do a lot better in an apartment without the high fees or even downsizing to your own home.
With all that said, I agree with J.D. and you shouldn’t rush into anything until you have that “dream” career lined up.
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Yep, this is a GREAT time in history to just junk your job and move to a small town with seven minimum-wage job openings! Try selling the condo without disclosing the upcoming assessment and get an up-close and personal acquaintance with real estate attorneys. Wave “bye-bye” to your equity!
Rather than a career counselor, it sounds to me like Catherine really needs to spend some quality time with a good therapist.
“I’m obsessed with thoughts of selling my apartment and renting to give me more flexibility in pursuing a less stressful life. ”
Condos are maintenance-free. Not too many landlords are giving you “less stressful” life experiences, either.
“Obsessed” is a bad word to base decisions on! Get some professional help before you destroy your life!
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My dad always said.. “a bird in the hand…..
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I’m not going to give any life advice – I’m not qualified to do that. But here are the financial implications of some possible life choices:
As long as you intend to remain in the same city, staying in your current home will likely beat renting unless the special assessments for association repairs are enormous. By substituting rent for your mortgage payment, you lose the equity that your mortgage payments will be building up.
Also, one of the major problems with selling your home now is that you’d need to put the proceeds into a highly liquid, low risk investment and earn essentially zero return on that money. You can’t afford to put it in equities or anything else that has a long time horizon if you want it available to buy a new home in the near future.
However, once you do decide to move to another city, and you know that will make the move in a year or so, it could be a good idea and sell the condo and rent while you look for your new home in the other city. By selling your home first, you know what you can afford. Buying a new home first puts a lot of pressure on you to sell your own home fast (even if the sellers of your new home accept a contingent sale.) This is particularly true if the new home is in a new city, where it will be harder for you to look for homes to buy.
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If anything, I would put the condo out there and test the market. Who knows, it may not be worth what you thought and that could affect your decision. Condos have taken a really hard hit these past 2-3 years.
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While some so-called real estate experts are predicting that prices will recover an equal number of investment advisors are predicting that values will continue to fall. Its always wise to question the motivation behind opinion. If its someone who makes a living selling real estate, I’d really have to question everything they say.
I’d sell the condo and invest the proceeds in dividend paying preferred shares. There are several paying out better than 5.5% and those dividends could go a long way towards paying the rent. Dividends are taxed at much lower rate than regular income and even a 5% return on say a 400K investment would yield 20K, which even after taxes would go a long way towards covering the rent.
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@Carrie (#53) – I think you need to drop the “k” after $4300 otherwise only Warren Buffet will be able to afford monthly rent of $4.3 million–and not for long.
Catherine, don’t listen to the commenters telling you to not disclose the upcoming special assessment. If you do, like SLCCOM said, you can “wave bye-bye to your equity.”
I think you need to think through this dilemma–and wasting time by selling your home and finding a new one isn’t going to help. Frankly, it almost sounds like a mid-life crisis and you shouldn’t be taking impulsive action.
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@Courtney way up there, thanks for correcting me on the asset/liability thingy. Obv it’s a good thing I’m a renter, eh?
Still standing by the rest of my comment though!
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I am in a remote place right now and only have an internet connection when I am near a library. I drove to a library to say what I’ve been wanting to say the two times I read the blog post and comments.
I want to encourage you to jump in and try something new. You already said work is not satisfying and see reasons to leave the condo….. I bet when you make a change, other life decisions will flow from it, from the space you create in your life.
I am mid 40′s too, and discovered something about how decision making works in my life. For the past ten years, I’ve thought often about moving, and did more than thinking. I methodically worked out the finances, the options, and what I was seeking, many times. But I stayed put in my work and my city, and bought a tiny country place in a nearby state, a second home.
I recently decided to retire from practicing law next year, after twenty years, because I have not been enjoying it. Catherine, this is the amazing part. Once I decided to do that, I felt freedom to do more. I will leave the city where I am living, sell or rent my house, and do something new. I don’t know what that will be, but I have ideas. I also know I am not a country girl, so I can’t just sell my city house and live in my cabin in the country and be happy. (P.S. If I my rent my city house, I will hire a neighbor to be property manager and fix things.)
I am not focusing on your finances, because I don’t see that as a burning issue. Your finances give you options in life.
I want to discourage you from taking it slowly, when you already know the work is not satisfying and want to leave the condo. I want to encourage you to make one decision and then another, and see what comes from the changes you make. With each step, you will be in a new place and see options you could not see before because your situation and perspective changed.
Congratulations on building a good financial basis. Good luck!
Kate
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I say, if you are not happy. THEN MAKE CHANGES. Life is to short! If you sell the Condo, you are mobile. You can do anything you want. By selling the condo, it will free up your time to do other things. You will not have to worry so much about the day to day and can focus on the tomorrow. I say do it. You can always take a part time job to produce enough income to keep your life going like it is. With the Assets you have, if you keep them in the bank (and don’t touch them) they should continue to grow.
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With her balance sheet, why she doesn’t sell some of her non-retirement investments to pay off her credit card, HELOC and beef up her emergency fund? Or put the freed $400 towards that debt?
If she’s going to be making a significant change, she’s going to need at least a year of expenses in an emergency fund. There’s no telling how long it will take to sell the condo and if she gets impatient and rents while still making mortgage/HOA payments, it’s going to be a drain on her finances.
My parents are dealing with this right now – my mom got impatient after waiting 3 months for their town home to sell and now they’ve made a cross-country move. Fortunately, they haven’t bought a place in their new location yet, so they aren’t struggling with two payments, but I’m afraid that’s going to happen soon.
The math on the mortgage debt does seem a little odd. I’m guessing the condo appreciated significantly in the time she’s owned it? Otherwise I don’t understand, with record low interest rates, how financing a third of what she initially bought the house for only drops the cost by ~30%.
Putting the condo on the market as soon as possible can’t hurt. It’s likely it’ll take months to sell. I don’t know if she needs the extra stress and expense of moving and showing the place, but it will at least give her a realistic idea of what she can get for it.
I second the recommendation of a therapist or life coach. Sometimes we obsess about things we think we have control over when things we don’t have control over aren’t going so well.
Best of luck!
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Catherine,
One more thing, because it’s been repeated many times in the comments.
Laws regarding disclosure of property defects vary by state. Where I am, a seller can disclose everything she knows about defects, or give the buyer $500 at the closing and not disclose anything. This is a common approach.
Also, I don’t know if a potential — not yet announced — future assessment is considered a property defect.
It’s worth doing some research where you are.
Kate
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Money wise she is in great shape. This whole decision is based on her restlessness. If quality of life would be better than go. Otherwise stay and pay off those debts – you have the money. Relax and enjoy your financial success.
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She is only in great shape IF she continues to be employed!
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I’ve got to agree with SLCCOM…don’t underestimate the severe lack of jobs in certain areas of the country. Some serious research would be in order.
Generally, I’m a big fan of taking a leap of faith, however, all of that great financial standing could get eaten up pretty quickly without a job, or with a low-paying job.
And I don’t think that getting another meaningless job, but this time for significantly less money, would be particularly helpful to this lady’s well being.
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I was wrong. She does clearly state she refinanced to a 30-year mortgage. I guess I was just incredulous that owning a home with a 62% equity could cost as much as renting and equivalent space. That’s what I meant when I wrote that something doesn’t smell right in her description of her situation.
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She should rent out her condo and join the Peace Corps for a few years, the sell the condo and move to the small country home with the garden!
Seriously though, she should stay put for a while, since renting in the same location makes her worse off financially, assuming her statement of renting costs is accurate.
She could do some research on different locations she’d consider retiring to and what the job market outlook is for each one in the next 10-15 years. Additional considerations are cost of living, locations where there are family or friends and what skills/talents she has now that can transfer to other jobs/sectors. Maybe there are skills she can acquire to support the future demand in potential retirement locations.
Once the research is done and she has it narrowed down to one or two, vistit, talk to people and find out what it’s really like to live in those locations. If she still wants to leave, put the condo up for sale, and start looking for a new place and get out of town!
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I didn’t read every word in every comment, but what about capital gains if she sells the condo and then rents? That’s a quick way to lose a lot of $$
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Here’s our story. We sold our house in 2008 for a very nice profit. After we paid off the mortgage and credit cards, we spent 2% of the profit on a very nice vacation. We let the rest sit in a high yield (4%) Rewards checking account while we considered our options. We then maximized our HSA contributions; put some in our retirement accounts; and a few cds. We rented and waited for two years. While we waited, we kept seeing the housing prices drop. Thankfully, we were able to pay cash for our house. We were not committed to any careers, so we were free to move about as we wished. The down side is we were not committed to any careers and now find it challenging to find good/higher paying jobs available. But, the upside is we have no debts of any kind and there is so much peace in that.
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A mortgage of $132,000 would yield a monthly payment of $708 a month @ 5 percent. By owning you only have to pay half your rent. After the mortgage is paid off then you only have to pay $0 per year for the rest of your life.
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Dave– no, you don’t have to pay $0 the rest of your life. You have to pay HOA/Condo fees and property taxes and upkeep.
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I agree with her to sell and take time to think. I am also in that same boat after my divorce a few months ago. I hope to sell and just rent for 6 months in one State then might move to another for 6 months to see where I want to live. I am retired so free to move with my 2 cats. Downsize is for me. Hope to sell the house with everything in it. Just the up keep cost a lot. Want to pay off my debt and be free of it for once in my lifetime. Then go from there. So many Repo’s out there home still losing value. I am with her on selling it. Cut losses now before homes take a harder hit. Jude
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