Author Topic: Sell, Refinance or Keep?  (Read 2228 times)

Ms.Fortuna

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Sell, Refinance or Keep?
« on: April 13, 2016, 07:43:01 PM »
Hello,

Writing first time, found this forum a few months ago, very inspired to reach FI, hopefully in 9-10 years. I have difficult time to decide what makes more sense to do with my house..

My current savings are 60k and The equity of aprox. 136k in the house..
I bought my house in 2013 for 260k and put 100k down (obviously before finding this forum). That was my only savings at the time (inheritance) , mortgage 160k @ 3.5 30 yrs. I am newly divorced and it is only my 4 y.o. Son and I living in this 1,700 sa ft. Feels such a waste plus seems too much money tied in the house..when FI, most likely would move from the area because of high property taxes..
The current value of the house is about $285-290k..remaining loan is 149k.
My current monthly payment is 1,337 including taxes and insurance (taxes 5,100/yr and insurance 610/yr)
I could rent a flat for 800-900 which probably would also decrease my water and utilities bill by $80..
Another option I thought would be to refinance with cash out (79k based on 285 value). The quote I got from a bank is 3.65 plus 1500 in fees for a 30 fixed..228k loan- 1,040 mo payment , 1,516 with tax and insurance.
Ran rent vs buy calc and FireSim calc... Still not sure.
What would make more sense from the FI acceleration perspective ?



« Last Edit: April 14, 2016, 04:29:07 AM by Ms.Fortuna »

ShoulderThingThatGoesUp

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Re: Sell, Refinance or Keep?
« Reply #1 on: April 14, 2016, 06:33:30 AM »
You can lower your housing costs by a huge percentage and have less maintenance to do? Hard to justify staying.

not_a_trex

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Re: Sell, Refinance or Keep?
« Reply #2 on: April 14, 2016, 08:10:20 AM »
Agreed, it seems it would be cheaper if you moved somewhere else. But before you make any decisions, what do you see yourself doing with the money if you pulled it out of the house?

Ms.Fortuna

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Re: Sell, Refinance or Keep?
« Reply #3 on: April 14, 2016, 09:58:14 AM »
mot_a_trex, I would invest in index funds, in the best MMM tradition:-)

I would want to stay in the area though even if I decide to rent- 8 miles from work and excellent schools.

ShoulderThingThatGoesUp

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Re: Sell, Refinance or Keep?
« Reply #4 on: April 14, 2016, 10:10:05 AM »
Spring is now! Start calling realtors and checking out apartments. Since your kid will be starting school soon it would probably be smart to go to the school district and get an idea of elementary school attendance boundaries - they do not always make sense.

This also gives you more flexibility to make a move quickly if you do come up with a good plan to move somewhere with a lower cost of living.

clarkfan1979

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Re: Sell, Refinance or Keep?
« Reply #5 on: April 14, 2016, 10:23:18 AM »
If you did do a re-fi, what would you do with the money? This doesn't seem like a good choice, but I thought I would at least ask.

The high property taxes is a personal issue with me. If you have plans for FI, it's hard to justify buying in areas with high property taxes.

Because of the high property taxes and the house is too big, you would reach FI much sooner by selling the house. If FI is not important to you, then enjoy the house. Neither choice is right or wrong. It's just a matter of preference. Good job on at least putting 20% down on the purchase. Now you at least have the option to sell.

Ms.Fortuna

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Re: Sell, Refinance or Keep?
« Reply #6 on: April 14, 2016, 04:50:22 PM »
Clarkfan, my concern was that I put too much for down payment instead of investing the money. Re finance with cash out seemed like an attempt to mitigate that.
But having FI a priority, I am inclined to sell the house now and rent a smaller space..just needed this last push :)

sun and sand

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Re: Sell, Refinance or Keep?
« Reply #7 on: April 26, 2016, 08:41:20 PM »
Hello,

Writing first time, found this forum a few months ago, very inspired to reach FI, hopefully in 9-10 years. I have difficult time to decide what makes more sense to do with my house..

My current savings are 60k and The equity of aprox. 136k in the house..
I bought my house in 2013 for 260k and put 100k down (obviously before finding this forum). That was my only savings at the time (inheritance) , mortgage 160k @ 3.5 30 yrs. I am newly divorced and it is only my 4 y.o. Son and I living in this 1,700 sa ft. Feels such a waste plus seems too much money tied in the house..when FI, most likely would move from the area because of high property taxes..
The current value of the house is about $285-290k..remaining loan is 149k.
My current monthly payment is 1,337 including taxes and insurance (taxes 5,100/yr and insurance 610/yr)
I could rent a flat for 800-900 which probably would also decrease my water and utilities bill by $80..
Another option I thought would be to refinance with cash out (79k based on 285 value). The quote I got from a bank is 3.65 plus 1500 in fees for a 30 fixed..228k loan- 1,040 mo payment , 1,516 with tax and insurance.
Ran rent vs buy calc and FireSim calc... Still not sure.
What would make more sense from the FI acceleration perspective ?

Can you rent out a room or basement in the house?