Author Topic: Keep paying down the townhouse or buy a house with no extra fees?  (Read 1386 times)

natb2347

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I own a townhouse that has a low interest rate of 3.875%. I owe 219k on it. BUT I also pay PMI (around 75$ Per month) for the life of the loan. Plus I pay condo fees monthly at 177$ (and will go up as needed but has remained pretty stable).  My question is should I keep my condo or get a house for the same amount I pay in mortgage tax pmi and condo fees and just pay it all on an actual mortgage with no extra fees? Am I wasting my money?? 

I've also thought about renting it out and then buying a house but I'm doubting I can get the amount needed to cover the costs in my area. 

What to do?
(My only other loan is my car 11k which I am furiously paying down on with a goal of October 2018 pay off. I have excellent credit. No other debt.)

GregO

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Re: Keep paying down the townhouse or buy a house with no extra fees?
« Reply #1 on: February 17, 2017, 05:03:29 PM »
That's a tough question without having other housing options to compare it against.  If you have enough equity in the house, you can refinance to get rid of the PMI.  And you do get some benefit out of the condo fees.  For example, the condo fees likely cover exterior maintenance and lawn care.  So if you got a house, you'd eventually have exterior maintenance costs (roof, driveway, paint, etc) and a yard to upkeep.  So your maintenance costs would likely go up.  They most likely wouldn't go up $177/ month though, so there'd still probably be some savings there.

I think the best answer is that downsizing is typically a good option.  Renting or buying something smaller is usually a good option to reduce your expenses.  But without knowing what rent or a smaller mortgage cost would be, it's hard to say much else.  I'd say it's worth investigating rentals and other houses for sale.  You can then compare the expenses between them and your current place and have some solid numbers to make a decision on.