Gonna sell and buy somewhere cheap and have $0 mortgage

[Anonymous]

OP I bought a nice (expensive, IMHO, over $300k) condo in a nice neighborhood in the last year. There are good points and bad points to living in a condo. The not dealing with snow and leaf raking and clogged gutters and lawn mowing is huge for me - I am a single working mom and I hated that stuff. I have a covered garage and LOVE it. No more taking in the garbage cans in the rain, yay.

But, there are other issues. My condo is pretty quiet but I do hear my upstairs neighbors sometimes. I don't do loud or late things because I don't want to bother my neighbors. The condo management is kind of a pain, although I am allowed to do what I want inside my house. I own from the drywall in.

Anyway, my advice is rent first, find out about the area, the building even, first, and then take your time finding the condo that works for you.

Honestly if I could make it work I'd get the hell out of the DC area, but can't leave because of shared custody.

[Anonymous]

Anonymous wrote:My house is in an up and coming neighborhood but in the last 8 yrs i've owned it it hasn't appreciated much. It's fine but i don't love it. I could hang on to it but i am sick of it. Mice, neighborhood crime, shoveling snow, etc. SO OVER IT. Will probably sell this spring for $450,000. I owe $260,000 on it. I'm struggling to pay for private school so taking DC out. I could then buy a large condo/townhouse in silver spring for $150,000 and send my kid to local MCPS school. I'm REALLY loving the idea of having $0 mortgage and $0 school fees and not shoveling my own snow or dealing with landscaping; having a pool and tennis courts and better security.

I work in downtown silver spring but I plan to resign bc I hate it.

What would you do?

PP again, another thing you could do - if you are going to pocket say $200k on the sale, get a nice condo with good schools and just have a really LOW mortgage for a while. You can work hard to pay down the principal and be mortgage free soon, but not in a low end condo in a low end neighborhood. Just an idea. Good luck.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:0 mortgage may seem attractive but then you don't get the deduction for interest paid. Just factor that in too.

I think OP would rather pay $0 in mortgage interest than pay $1000 a month in mortgage interest and get $250-$300 of it back as a tax deduction.

No shit. Do you people really think the mortgage deduction is free money or something? Do you get some sort of strange satisfaction giving $4 to a bank rather than $1 to the government?

The goal is to lower your tax bill as much as possible. What good is paying 0 and finding out you owe a shitload later?

Again, you are advocating paying a bank $3-$4 in interest just to shave $1 off your tax bill. On what planet does that make any sense?

[Anonymous]

With no mortgage, I can fully fund my SEP IRA, which is way more than my mortgage deduction ever was.

[Anonymous]

If your primary financial goal is simply to lower your tax bill as much as possible, please contact me, as I have some products I would like to offer you...

The financial ignorance of some of these posters is astounding.

[Anonymous]

I actually liked living in a fee simple townhouse community. My HOA fees were $200/quarter and they did have (fairly relaxed) standards, so people couldn't completely neglect their property. It was not bad at all.

[Anonymous]

If I had no mortgage I would still be paying close to $20,000/yr in property taxes and homeowners insurance. My area (outside DC) has very high tax rates.

[Anonymous]

I know someone that did this. Great idea. But make sure you know how much you will have, and exactly where you will buy. There is no sense in throwing $ away on interest.

[Anonymous]

Anonymous wrote:I know someone that did this. Great idea. But make sure you know how much you will have, and exactly where you will buy. There is no sense in throwing $ away on interest.

It actually makes quite a bit of sense, depending on the circumstances.

For instance, is your big pile of money just big enough to hand over to the bank, or will you have a pretty large pile even after you do so? Are you sure you won't ever need access to more cash than you have on hand? Because if you do, you'll be paying a heck of a lot more than the interest rate on your mortgage to get your hands on it.

Add that to the tax deduction (with all the asterisks raised by PPs) and the possibility of investing the cash and the fact that you'll still have to pay taxes and insurance and, well, the zero-principal-and-interest isn't as attractive as it seems.

[Anonymous]

Anonymous wrote:I am genuinely curious were you think you can buy a property outright for $160,00 (about all you'd have left when you sell) that has good schools?

here?

http://www.trulia.com/property/3142874104-9-Ashmont-Ct-Silver-Spring-MD-20906#photo-5

Kennedy HS

[Anonymous]

OP, do you work from home? If commuting isn't an issue (or if you work in silver spring) what about condos in the northern part of Rockville, or Gaithersburg? There are very good school options there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My house is in an up and coming neighborhood but in the last 8 yrs i've owned it it hasn't appreciated much. It's fine but i don't love it. I could hang on to it but i am sick of it. Mice, neighborhood crime, shoveling snow, etc. SO OVER IT. Will probably sell this spring for $450,000. I owe $260,000 on it. I'm struggling to pay for private school so taking DC out. I could then buy a large condo/townhouse in silver spring for $150,000 and send my kid to local MCPS school. I'm REALLY loving the idea of having $0 mortgage and $0 school fees and not shoveling my own snow or dealing with landscaping; having a pool and tennis courts and better security.

I work in downtown silver spring but I plan to resign bc I hate it.

What would you do?

PP again, another thing you could do - if you are going to pocket say $200k on the sale, get a nice condo with good schools and just have a really LOW mortgage for a while. You can work hard to pay down the principal and be mortgage free soon, but not in a low end condo in a low end neighborhood. Just an idea. Good luck.

Op won't pocket $200K from the sale. More like $160k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:0 mortgage may seem attractive but then you don't get the deduction for interest paid. Just factor that in too.

I think OP would rather pay $0 in mortgage interest than pay $1000 a month in mortgage interest and get $250-$300 of it back as a tax deduction.

agree

I agree as well. I always shake my head when people say that they "need" a mortgage due to the tax deduction. I have a friend who will have her house paid off this May and she was talking about the loss of tax deduction as if that was a bad thing. I just looked at her and commented "but you won't have that pesky monthly mortgage". I cannot wait to have my house paid off! We are paying as much as we can each month in the hopes that it will be paid off right as our oldest goes to college.