Author Topic: Housing in Los Angeles  (Read 602 times)

Kash101

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Housing in Los Angeles
« on: May 16, 2018, 02:32:22 PM »
Hello Everyone ! I would like to pose my situation and welcome your feedback.

Goal : to decrease my mortgage by 1/2 - 3/4
Current Situation : Married, no kids yet, planning one to two in the next few years
Job: Live and work in LA , which is comically expensive for real estate
Current Home: Purchased ~ 1.5 years ago for 2.6M. Could probably sell today for 3M. 5 bed / 6 bath . Great school district for elementary . Would consider private school beyond that. Have a 7/1 ARM on the home. Put ~ 30% down.

Pros: can stay indefinitely , good school, great part of LA, great house
Cons: not as coastal as I would like , private school for jr high and high school ( $$ ) big house that we don't need all the space !

I am self employed so for the immediate future, I cannot leave the state or city. Fortunately the business has been good, which may change but not yet.

Do I sell the house now (before a potential downturn in the market, given interest rates are starting to creep up ) , and then rent for about a year and save ? in LA, this would : (1) still probably eventually translate into me buying something ~ 3-4M , but in an area with no private school necessary, smaller ( but better location for me, closer to the beach so I can surf more etc ) and no need to move ever again or (2) buy something more inland, less of a "high demand" area, sacrificing location , proximity etc but lower mortgage and still private schools...

or do I stay the course?

or something else ?

Thank You.




Abe

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Re: Housing in Los Angeles
« Reply #1 on: May 18, 2018, 07:33:37 PM »
I'd only consider selling if you are sure a rental with your requirements will be substantially cheaper. There are significant transaction costs to buying and selling houses (1% of the sale price for real estate transfer tax, 5% broker fee, etc). It may be better to re-finance into a lower rate 30 year mortgage. You don't need a 5 bedroom, 6 bathroom house for a 4-person family.