Want to move but don’t want to change interest rates

[Anonymous]

OP here. We’re very unlikely to be underwater on this place - like I said, pretty sure we will come out ahead due to some smart upgrades and what the rest of the neighborhood is selling for.

We did have a mold /allergen issue, which we resolved completely and throughly, but concerned it could return - so we don’t want this place on our hands.

Renting is an interesting idea, but we are kinda eager to be done with this place’s liabilities.

[Anonymous]

Anonymous wrote:My partner and I bought our first home Dec 2021. We bought a starter home - a townhouse that is quite within our financial means, and wasn’t as intimidating as starting with a SFH (also, had 8 failed offers on SFHs - so figured it was time to pivot).

Fast forward one year and we want to move [insert laugh-cry emoji here].

We’re tired of dealing with the HOA and close neighbors, and we want more space, SFH, etc.
Our current home seems like it will sell at a price that will more than cover what we spent plus closing costs, and then some. We’ve made some smart upgrades and the neighborhood seems to be selling for well over what we bought ours for.

But, we have a low interest rate, and if we sold and bought somewhere new, our rate would jump up, and we wouldn’t be able to afford what we want because of that.

Not enough cash to buy somewhere without selling this place (or investments that are down due to the market), and we want to be rid of this HOA anyway.

Any ideas on what to do?
Currently we’re between:
A) sell this spring, and rent till rates go down
B) sell this spring and buy somewhere different but not as nice as we want
C) wait till the fall to sell (bonus, no capital gains tax bc 2 years of ownership) and hope rates fall by then

Thoughts?
Thanks!

You just answered yourself. If you can't afford it, don't buy it.

[Anonymous]

C.

I think after a little over a year 1 year, you'll be surprised at how much taxes, realtor fees, title changes etc. will end up costing and you'll be disappointed. It usually takes about 4 years to recoup all those costs.


The rates are what they are, and a lot of people are in your position. Knowing what you could afford before is hindsight and you should just wipe that from your mind, because it doesn't really matter. What you can afford now is a different story. theoretically the home prices should've come down to match, but that's just not happening. Plus even if the home prices did come down, you'll be paying more towards interest and less towards principal. it just sucks, no way getting around it.
You're just going to have to come to terms with that if you're that unhappy.

[Anonymous]

You and many other homeowners Op. hence why inventory is so low right now.

[Anonymous]

Same, OP. Same. We have a 2.375% mortgage, which is amazing. But we have had so many issues with our TH, including several weird leaks, dryer vent replacement, and a neighbor who breaks many, many HOA rules (trash all over, renting from foreign owner who does not pay HOA dues, etc.). Ideally we would move again but are staying put because the current rates render everything unaffordable. It's otherwise a good house and I'm trying not to be dissatisfied.

Some VA loans are assumable. You could look into it, but I have to imagine that anyone with a really low interest loan is in our same position and unwilling to move unless they can get a similar rate. We're all locked in.

[Anonymous]

Anonymous wrote:My partner and I bought our first home Dec 2021. We bought a starter home - a townhouse that is quite within our financial means, and wasn’t as intimidating as starting with a SFH (also, had 8 failed offers on SFHs - so figured it was time to pivot).

Fast forward one year and we want to move [insert laugh-cry emoji here].

We’re tired of dealing with the HOA and close neighbors, and we want more space, SFH, etc.
Our current home seems like it will sell at a price that will more than cover what we spent plus closing costs, and then some. We’ve made some smart upgrades and the neighborhood seems to be selling for well over what we bought ours for.

But, we have a low interest rate, and if we sold and bought somewhere new, our rate would jump up, and we wouldn’t be able to afford what we want because of that.

Not enough cash to buy somewhere without selling this place (or investments that are down due to the market), and we want to be rid of this HOA anyway.

Any ideas on what to do?
Currently we’re between:
A) sell this spring, and rent till rates go down
B) sell this spring and buy somewhere different but not as nice as we want
C) wait till the fall to sell (bonus, no capital gains tax bc 2 years of ownership) and hope rates fall by then

Thoughts?
Thanks!

(C), OP. Then you can evaluate your options again in the fall.

[Anonymous]

C. Or D - stay for years. You are underestimating the cost of selling a house.

[Anonymous]

You said you can’t afford what you want because of the rates. Why would you again buy something that isn’t what you want?

I would sit tight and make my peace for another couple of years and save in a financially comfortable position rather than sell, even if you don’t lose any money, and buy another home that isn’t exactly what you want long term.

[Anonymous]

Anonymous wrote:Rates will not fall.

We owned a townhouse, bought for same reasons because SFH were so expensive and competitive in our market.

Sell ASAP. PP is right. Rates are not going down from here, we won’t see 3% probably in our lifetime. Deal with it.

With WFH and rising rates, the value of your TH is going to drop, and likely drop faster than SFH (TH always underperform whatever SFH market is doing so if it is your primary savings vehicle for a SFH it’s a bad choice).

I would sell this spring, and buy a longer term home. Or move in spring and rent out and be prepared to duke it out with HOA (though most HOAs HATE rentals, so it would be a nice FU to keep the TH as investment, but only if rent covers entire PITI AND has a moat of desirable features, like walkable to metro).

[Anonymous]

Anonymous wrote:Same, OP. Same. We have a 2.375% mortgage, which is amazing. But we have had so many issues with our TH, including several weird leaks, dryer vent replacement, and a neighbor who breaks many, many HOA rules (trash all over, renting from foreign owner who does not pay HOA dues, etc.). Ideally we would move again but are staying put because the current rates render everything unaffordable. It's otherwise a good house and I'm trying not to be dissatisfied.

Some VA loans are assumable. You could look into it, but I have to imagine that anyone with a really low interest loan is in our same position and unwilling to move unless they can get a similar rate. We're all locked in.

This. Look for homes with assumable, low mortgages. There aren't many out there but focus on those.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Rates will not fall.

Of course they will eventually. Not next year though.

They are predicting rate cuts this year because the fed is really dumb and hiked to late and too fast

Who is “they,” and is it people who misunderstood smarter analysts who said the fed will hike MORE BUT SLOWER not actually cut?

Economists agree on the cuts , this fed will go down as the worst in history, Biden can get a lot of votes by firing them and cutting the rates

Your wishful thinking isn’t a “prediction.” Rates are going up.

[Anonymous]

Anonymous wrote:My partner and I bought our first home Dec 2021. We bought a starter home - a townhouse that is quite within our financial means, and wasn’t as intimidating as starting with a SFH (also, had 8 failed offers on SFHs - so figured it was time to pivot).

Fast forward one year and we want to move [insert laugh-cry emoji here].

We’re tired of dealing with the HOA and close neighbors, and we want more space, SFH, etc.
Our current home seems like it will sell at a price that will more than cover what we spent plus closing costs, and then some. We’ve made some smart upgrades and the neighborhood seems to be selling for well over what we bought ours for.

But, we have a low interest rate, and if we sold and bought somewhere new, our rate would jump up, and we wouldn’t be able to afford what we want because of that.

Not enough cash to buy somewhere without selling this place (or investments that are down due to the market), and we want to be rid of this HOA anyway.

Any ideas on what to do?
Currently we’re between:
A) sell this spring, and rent till rates go down
B) sell this spring and buy somewhere different but not as nice as we want
C) wait till the fall to sell (bonus, no capital gains tax bc 2 years of ownership) and hope rates fall by then

Thoughts?
Thanks!

One thing to keep in mind: buyers won’t necessarily want to give you the same price as neighborhood comps, because they also look at price history and will see you bought a year ago for X. It is not an entirely rational process but be careful it may play a role.

I saw it happen to a house in the neighborhood. People wanted to move for reasons unrelated to the house but buyers were 1/ suspicious the house was resold that quickly, it gives a signal that the original buyers were not enough in love with house to stay, so why would they, as new buyers, end up feeling differently; 2/ didn’t want to be suckers and pay 100k more than the year before when there was no obvious expensive Reno; 3/ gave signal that sellers were in a bind (who would want to resell after a year if they were not a bit desperate ?) and a good deal should be made on the house…

[Anonymous]

Anonymous wrote:OP here. We’re very unlikely to be underwater on this place - like I said, pretty sure we will come out ahead due to some smart upgrades and what the rest of the neighborhood is selling for.

We did have a mold /allergen issue, which we resolved completely and throughly, but concerned it could return - so we don’t want this place on our hands.

Renting is an interesting idea, but we are kinda eager to be done with this place’s liabilities.

There's no guarantee your next home won't have even bigger liabilities. Owning a home is always rolling the dice on how much can potentially go wrong and how much it will cost you.

[Anonymous]

Personally I would move soon to get to a single family home, but then plan to stay there for a long time.

[Anonymous]

I highly doubt any home is worth more now than Dec 2021. Or at least not worth Dec 2021 price + selling cost. So you aren’t going to make any money or owe any cap gains.

Sell if you want, but be realistic. Why did you buy a house so poorly suited to you.