Sell your current house and take the 400K mortgage (I assume you've done the math and know how the new mortgage and new house expenses will effect your monthly budget, savings, etc and are comfortable with it. )
We are looking at purchasing a new house for approximately $750K. We plan to put down $350K and take a loan for $400K, with a monthly mortgage payment of around $2500 at a 6.6% interest rate.
We are considering two options:
Sell our current house and use the proceeds to pay off the new mortgage later.
Rent our current house for $2200 per month to help cover the new mortgage.
We would appreciate any thoughts or advice on this matter.
Renting your current house may or may not "help cover the new mortgage". You will still need to pay house insurance (which may be higher since it is no longer your primary home), property taxes (which may be higher because it is no longer your primary home), you may need to pay for lawncare, you will still need to reserve some of the "rent" for routine maintenance current and future. You will also need an Emergency Fund to cover ALL the expenses for the rental house (including utilities) for 3 to 6 months incase you loose a tenant and cannot get a new tenant immediately. You will also need to "clean and repair" the house between tenants - that could mean repainting, repairing the odds and ends of things that break with routine use - leaking faucets, closet doors that come off their tracks, light switches/plugs that fail, etc. When you live in a home you don't see the wear and tear and you sometimes just live with things that don't work quite right. When you have a rental property - you see it all nice and clean and working when you rent it out - and then 2 or 3 years later when your good tenant moves out you see all the wear and tear that naturally occurs.
And don't forget that if you rent - your old appliances will eventually need to be replaced (if they are 5 years old now - in 5 years they will be 10 years old). The roof, HVAC, water heater, flooring, plumbing all keep getting older every year that passes - even when you don't live in the house.
Statistics: Posted by LittleMaggieMae — Wed Jul 24, 2024 11:11 am — Replies 20 — Views 1789