Author Topic: Mortgage vs. savings for new home  (Read 1278 times)

GreenSheep

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Mortgage vs. savings for new home
« on: September 26, 2015, 01:38:55 PM »
I unfortunately bought my house in 2007 and therefore grossly overpaid. Now I'm living with my boyfriend in his house, have no need for my house anymore, and plan to move together to another state within the next 2-3 years. We may end up buying property in the other state as soon as next year. We plan to build a Mustachian house there over the next few years after that.

At the moment, I've whittled my mortgage down to less than what similar homes in the neighborhood have sold for recently, and my interest rate is variable but is currently only 3% (changes every July). Should I continue to pay down my mortgage with the assumption that I'll recover that money when I sell the house (possibly as soon as next year, but could be another 2-3 years), or should I put the extra money into a savings account earmarked for purchasing the next home? I don't want to invest the money because of the short timeframe, and there is an obvious 3% "gain" by putting it toward the mortgage, but recovering that gain is dependent on the housing market. What do you think?

Telecaster

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Re: Mortgage vs. savings for new home
« Reply #1 on: September 26, 2015, 03:55:51 PM »
Cash is a much, much, much better place to keep your money than in the house. 

TomTX

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Re: Mortgage vs. savings for new home
« Reply #2 on: September 26, 2015, 03:57:51 PM »
Are you renting it out or anything? Leaving a house empty is bad.

GreenSheep

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Re: Mortgage vs. savings for new home
« Reply #3 on: September 27, 2015, 11:28:36 AM »
Thanks! Yeah, I've considered renting it out, but I think I'm probably better off just selling it sooner rather than later. (It's only been empty for a few months.) If I'm going to be trying to sell it within as little as a few months from now, I worry that the money made on renting will only be used to fix problems the renters cause. Add to all of this the fact that there's a monthly $195 HOA fee, then factor in property tax, and it's becoming clear that I need to just get rid of the place!