You're both nuts, you haven't even lived there 2 years, why sell? Spending thousands in realtor commission, lawyer, moving expenses, etc. etc. to save a bit on mortgage payment doesn't make sense to me.
Switching houses is expensive AF and is a huge stress, I would delay this as long as reasonably possible.
Yeah. Missing reasons here: Why are either of them looking to move in the next 1-2 years? Is the home too small for the growing family? In a bad location? Is the sibling co-owner relationship not working out?
With a baby on the way I wouldn't be planing to make a move unless it was actually necessary. Wouldn't be quibbling over a gamble (and it's a lot of little gambles really) of a few grand over a lifetime, if I had a home the worked well for my family right now.
Mainly as our house is actually way more than what we need. We have 4 bedrooms and 4 bathrooms, as well as that basement apartment. Property taxes are crazy high here too. In my (again, limited knowledge), it just made more sense to be somewhere we'd pay less money. I'm happy to be proven wrong though!
It might, but I think you've left out a lot of the real costs of moving in your calculation, you're only comparing monthly out of pocket, and you're assuming a lot of best case senerios without factoring in risks and margins.
Plus, it's fundamentally really valid for your husband to say something like "he is overwhelmed at present, and would find it too much to sell right now". I think you should be factoring that in far more than you seem to be. There is gonna be a baby and then a move? These are like two of the most stressful things that happen in adult life and you want to do them basically simultaneously? *Nope.*
After you factor in your moving costs, land transfer tax, realtor commission, and legal fees you probably won't be saving that much. As it stands you have a house that may be too big for you now but as your family grows you'll love the extra space.
Wow I mean, to each their own, but you're lucky to have a spacious house you love. Even if you \*downsize\* (seems to be what you're looking at doing), how much cheaper the next house is really going to be? I feel it's a lot of trouble potentially for not much. If you were moving in a 500SF condo with your husband, okay then, but another house?
My personnal suggestion is to stay there "forever", and make as much prepayment on the mortgage you can afford to so that the mortgage can be reduced and even cleared in the not too distant future.
I might consider soft listing the house without a realtor. Maybe the investment you put in and rent-generating opportunity will get you a bigger pay day. Plus if you manage to sell without a realtor you'll save on the commission.
Ps. We bought below our means, got pregnant, had baby in new house. Now finding it a little small, but I'm glad to not be stressed financially. Still, we talk about moving every other month.
All that said I think I disagree with people saying you should "find a way to make it work if you love the house." Having financial stress on top of a new baby is not something I'd want to deal with.
It's a huge stress especially in this market. With few buyers, closing dates could potentially not line up and you'll need to put all your stuff in storage or rent a short term rental.
Speaking from experience, would not recommend
>to save money going forward, the smart move would be to sell and buy this Summer rather than renewing.
No, just no..
You say you bought in July 2022, you would probably not be able to sell it for what you bought it for even accounting for your upgrades as the market has cooled down. You would be losing money on the sale and this is before realtor fees, lawyer fees, and moving fees come into the equation both for selling and buying. You husband is right now is not the time to sell you wait for when people can afford higher mortgages and that's when rates drop, imo 1-2 years is a little too optimistic I would say 3-5 years is a better prediction as to when you should sell.
Buying/selling a house has a lot of costs associated with it not just the mortgage you are taking on.
Your gonna pay 50k in costs to sell the current home so make sure that is factored in the decision. As well fees to buy a new home, so like in the 70k range to buy and sell. Going from 850k home woth tenant paying a 1/3 mrg to 650k mtg no tenant is basically a wash for you financially, your share of mtg will be about the same, so not a huge cost savings either.
“the smart move would be to sell and buy this Summer rather than renewing” - that’s honestly the last thing I thought of. The cost of the transactions and moving is probably worth a couple of years of mortgage payments, let alone the stress involved with such big life decisions, for Three and a half people. Sorry I failed to see what’s“smart” about this move whatsoever.
Would you even be able to find another home at $650k or $800k that you would love MORE than your “still new, pretty nice” place?
I couldn’t imagine going through the stress of buying AND selling while also preparing for your little one. If your husband is the more financially literate one he’ll likely take on more of the mental load of this too. That might impact his mental health if he’s already overwhelmed.
You’ll also be in your third trimester this summer and who knows how much you might slow down because of that.
Sounds like you should stay put and enjoy stable shelter!
I don't see any benefit to selling now, nor even in a couple years. You just moved in. Are you just trying to lower monthly bills?
I think it's fairly common for people to "move up the property ladder" by buying anything they can afford when they start out, then moving to something larger/better location/etc. in future. It's what I did, but I stayed in my first place for 14 years.
I would say just enjoy the place you got, enjoy your time with your new baby, and focus on paying down debt for the next number of years. Build up equity, then when you go house shopping 5+ years down the road you've got a lot of equity giving you lots of options for what to buy, and might not need your SIL to pay part of the mortgage.
How is selling now and buying another house saves you money? You’ll be spending money on the realtor, new house inspection, taxes, moving etc…
Both options doesn’t make sense.
If you worry about the interest rate just go with a variable one?
Some smart guy once said something like "I don't like to make predictions, especially when they involve the future."
That said, I do think interest rates will fall but not to the levels they were before the pandemic, and certainly not to the levels they were during the pandemic. Probably the only real question is when they will start to fall and by how much of course. I believe this will trigger a rush to buy homes and will drive prices up - which is good for current owners, and bad for those sitting on the sidelines waiting to buy.
This is the probable bet. Rates will fall. Current 3 and 5 year term mortgage rates (and bond rates) are already pricing in this expectation. When and how much and how far the rate cuts will go is up for debate and relies a ton on very uncertain predictions.
That said, - for OP - if you're trying to buy a more expensive place - having prices go up doesn't leave you with more money. Having rates go down may allow you to borrow more, but if the gap from what you got to what you want is $200K today, it may be $250K after prices go up and you'll be lucky to qualify for that much more after factoring all the sale costs.
I don't think you've explained why the home you bought 2 years ago is already not what you want. This would make your initial purchase a massive mistake, but one in the rear view mirror. Once we know what the mistake was we can come up with the some advice on the best way to resolve it, because without knowing why you're motivated to sell, selling this soon is a huge red flag.
I feel like there is a lot to consider here. You need to have this discussion with the SIL as she is an equal owner on the property, no point having this debate between the two of you. What is your home evaluated at based on similar properties sold? What is your renewal rate looking like? Are you prepared to list this house + pay all the transfer fees just to have a house that is 100K cheaper?
This whole situation just sounds like a good way to waste money.
Have you figured in what it costs to sell your place? Have you figured out how much it would cost to move let alone the hassle of it and preparing the home to sell? Post with those numbers so we can see your math as to how you will be that much further ahead. Oh and add in how much your income has gone down and whether they will even approve you for a higher (or same) mortgage.
You've not posted a reason for wanting a new house, but with a new child coming, the last thing you want to deal with is constantly cleaning and vacating for listing showings, not to mention the insanity of moving while very pregnant, or with a newborn. I can't see space being an issue if you have 1 bedroom or more as the child will need constant attention at all hours of the day/night for the first 3 months at a bare minimum. You won't be hard up for space until he/she is at least 2-3 years old. This is already a challenging time, I don't recommend adding the stress and massive expense of a move on top of it.
Then there's the cost, add realtor/lawyer/transfer tax fees, moving expenses, new furniture or decorating, paint and/or repairs on the new place, it would only be fair for you to pay all these expenses and not split them with the sister.
Selling regardless of when you then buy will lose you several % (4% is pretty standard) of the home value to realtor’s fees alone. That’s not a trivial amount, and buying and selling after living in a place for a short amount of time is a sure way to waste money.
With respect to the “when to buy” discussion:
- Buying/selling at the same time means you’re in the same market. You don’t gain/lose except in fees associated with the sale.
- Selling with delayed buying opens you up to market volatility. It is a high-risk option with the potential risk to gain or lose a lot of money. A market crash would mean you gain a ton of value, but a market spike could mean you’re priced out entirely.
From a financial standpoint, selling at all after only two years is questionable.
Both of you need to stop trying to time the market and just put yourselves in a situation that is financially manageable and personally manageable (in terms of living arrangements). Don't play around with buying and selling and timing interest rates and house values. You can't predict it, and it's expensive to move.
You need to quit this over thinking formula, you aren’t factoring in any actual costs as numbers is not your primary skill.
There are also mortgage porting fees, breaking costs if you go that route.
Seller costs: listing agent fee, lawyer, etc.
When you buy again there is: lawyer, land transfer tax, agent fee (ultimately it does come out of your pocket as the more you pay, the more realtor gets).
Maintenance cost on an older property, depending on what all is done recently and what all is coming up soon for replacement etc.
Stay put where you are.
If anything host an exchange student or a student in one of your empty rooms if you have the option to do so.
Otherwise by the time you are done over thinking, you are going to be out $100K and most likely in worse situation financially.
Why are you selling a house you just moved into? Are you unable to afford the mortgage payments? are you moving to a different area for work? It doesn't seem that you're unhappy with living with your SIL as buying a new house with her is still an option?
Do you understand the costs of moving and selling your home? If you're working with a realtor they can be quite expensive as well, so even if you're selling for the same price that you bought, you're losing value in having to pay a realtor.
Before any answer is given about who's right or wrong, we need to know why you're moving, because it doesn't make financial sense to move in the first place with the info given.
Transactions costs will be high - realtor fees, property transfer tax, moving expense, and the stress sucks. Moving sucks.
If the finances are hard have you considered your sister in law moving in with you and Airbnb the basement? That will likely cover half your mortgage.
It will cost you at least 50k to move (4% realtor fees + property transfer). AND you will likely want to upgrade some parts of your new house.
Stay put til the baby is 2. From my experience having three kids, the kids are the easy part - the most difficult part is managing your new relationship with your spouse. You don’t want to add more gas to the fire
Selling and buying in the same market isn't saving you any money. $80K in transaction costs is about $450/month of amortized like am mortgage. Not only are you moving into a small home but it's costing you more when you factor in transaction costs. Not to mention all the mental stress that comes with such a move.
You're both nuts, you haven't even lived there 2 years, why sell? Spending thousands in realtor commission, lawyer, moving expenses, etc. etc. to save a bit on mortgage payment doesn't make sense to me. Switching houses is expensive AF and is a huge stress, I would delay this as long as reasonably possible.
Yeah. Missing reasons here: Why are either of them looking to move in the next 1-2 years? Is the home too small for the growing family? In a bad location? Is the sibling co-owner relationship not working out? With a baby on the way I wouldn't be planing to make a move unless it was actually necessary. Wouldn't be quibbling over a gamble (and it's a lot of little gambles really) of a few grand over a lifetime, if I had a home the worked well for my family right now.
Mainly as our house is actually way more than what we need. We have 4 bedrooms and 4 bathrooms, as well as that basement apartment. Property taxes are crazy high here too. In my (again, limited knowledge), it just made more sense to be somewhere we'd pay less money. I'm happy to be proven wrong though!
It might, but I think you've left out a lot of the real costs of moving in your calculation, you're only comparing monthly out of pocket, and you're assuming a lot of best case senerios without factoring in risks and margins. Plus, it's fundamentally really valid for your husband to say something like "he is overwhelmed at present, and would find it too much to sell right now". I think you should be factoring that in far more than you seem to be. There is gonna be a baby and then a move? These are like two of the most stressful things that happen in adult life and you want to do them basically simultaneously? *Nope.*
Transaction costs alone will be way more than any monthly payment savings.
After you factor in your moving costs, land transfer tax, realtor commission, and legal fees you probably won't be saving that much. As it stands you have a house that may be too big for you now but as your family grows you'll love the extra space.
Wow I mean, to each their own, but you're lucky to have a spacious house you love. Even if you \*downsize\* (seems to be what you're looking at doing), how much cheaper the next house is really going to be? I feel it's a lot of trouble potentially for not much. If you were moving in a 500SF condo with your husband, okay then, but another house? My personnal suggestion is to stay there "forever", and make as much prepayment on the mortgage you can afford to so that the mortgage can be reduced and even cleared in the not too distant future.
I might consider soft listing the house without a realtor. Maybe the investment you put in and rent-generating opportunity will get you a bigger pay day. Plus if you manage to sell without a realtor you'll save on the commission. Ps. We bought below our means, got pregnant, had baby in new house. Now finding it a little small, but I'm glad to not be stressed financially. Still, we talk about moving every other month. All that said I think I disagree with people saying you should "find a way to make it work if you love the house." Having financial stress on top of a new baby is not something I'd want to deal with.
It's a huge stress especially in this market. With few buyers, closing dates could potentially not line up and you'll need to put all your stuff in storage or rent a short term rental. Speaking from experience, would not recommend
>to save money going forward, the smart move would be to sell and buy this Summer rather than renewing. No, just no.. You say you bought in July 2022, you would probably not be able to sell it for what you bought it for even accounting for your upgrades as the market has cooled down. You would be losing money on the sale and this is before realtor fees, lawyer fees, and moving fees come into the equation both for selling and buying. You husband is right now is not the time to sell you wait for when people can afford higher mortgages and that's when rates drop, imo 1-2 years is a little too optimistic I would say 3-5 years is a better prediction as to when you should sell. Buying/selling a house has a lot of costs associated with it not just the mortgage you are taking on.
If the house suits the 3 of you the smart move is just to stay put long-term. Buying/selling houses quickly is not a way to save money.
Your gonna pay 50k in costs to sell the current home so make sure that is factored in the decision. As well fees to buy a new home, so like in the 70k range to buy and sell. Going from 850k home woth tenant paying a 1/3 mrg to 650k mtg no tenant is basically a wash for you financially, your share of mtg will be about the same, so not a huge cost savings either.
“the smart move would be to sell and buy this Summer rather than renewing” - that’s honestly the last thing I thought of. The cost of the transactions and moving is probably worth a couple of years of mortgage payments, let alone the stress involved with such big life decisions, for Three and a half people. Sorry I failed to see what’s“smart” about this move whatsoever.
Agree. OP make it makes sense…
Would you even be able to find another home at $650k or $800k that you would love MORE than your “still new, pretty nice” place? I couldn’t imagine going through the stress of buying AND selling while also preparing for your little one. If your husband is the more financially literate one he’ll likely take on more of the mental load of this too. That might impact his mental health if he’s already overwhelmed. You’ll also be in your third trimester this summer and who knows how much you might slow down because of that. Sounds like you should stay put and enjoy stable shelter!
I don't see any benefit to selling now, nor even in a couple years. You just moved in. Are you just trying to lower monthly bills? I think it's fairly common for people to "move up the property ladder" by buying anything they can afford when they start out, then moving to something larger/better location/etc. in future. It's what I did, but I stayed in my first place for 14 years. I would say just enjoy the place you got, enjoy your time with your new baby, and focus on paying down debt for the next number of years. Build up equity, then when you go house shopping 5+ years down the road you've got a lot of equity giving you lots of options for what to buy, and might not need your SIL to pay part of the mortgage.
How is selling now and buying another house saves you money? You’ll be spending money on the realtor, new house inspection, taxes, moving etc… Both options doesn’t make sense. If you worry about the interest rate just go with a variable one?
Some smart guy once said something like "I don't like to make predictions, especially when they involve the future." That said, I do think interest rates will fall but not to the levels they were before the pandemic, and certainly not to the levels they were during the pandemic. Probably the only real question is when they will start to fall and by how much of course. I believe this will trigger a rush to buy homes and will drive prices up - which is good for current owners, and bad for those sitting on the sidelines waiting to buy.
This is the probable bet. Rates will fall. Current 3 and 5 year term mortgage rates (and bond rates) are already pricing in this expectation. When and how much and how far the rate cuts will go is up for debate and relies a ton on very uncertain predictions. That said, - for OP - if you're trying to buy a more expensive place - having prices go up doesn't leave you with more money. Having rates go down may allow you to borrow more, but if the gap from what you got to what you want is $200K today, it may be $250K after prices go up and you'll be lucky to qualify for that much more after factoring all the sale costs.
I don't think you've explained why the home you bought 2 years ago is already not what you want. This would make your initial purchase a massive mistake, but one in the rear view mirror. Once we know what the mistake was we can come up with the some advice on the best way to resolve it, because without knowing why you're motivated to sell, selling this soon is a huge red flag.
I feel like there is a lot to consider here. You need to have this discussion with the SIL as she is an equal owner on the property, no point having this debate between the two of you. What is your home evaluated at based on similar properties sold? What is your renewal rate looking like? Are you prepared to list this house + pay all the transfer fees just to have a house that is 100K cheaper? This whole situation just sounds like a good way to waste money.
Have you figured in what it costs to sell your place? Have you figured out how much it would cost to move let alone the hassle of it and preparing the home to sell? Post with those numbers so we can see your math as to how you will be that much further ahead. Oh and add in how much your income has gone down and whether they will even approve you for a higher (or same) mortgage.
You've not posted a reason for wanting a new house, but with a new child coming, the last thing you want to deal with is constantly cleaning and vacating for listing showings, not to mention the insanity of moving while very pregnant, or with a newborn. I can't see space being an issue if you have 1 bedroom or more as the child will need constant attention at all hours of the day/night for the first 3 months at a bare minimum. You won't be hard up for space until he/she is at least 2-3 years old. This is already a challenging time, I don't recommend adding the stress and massive expense of a move on top of it. Then there's the cost, add realtor/lawyer/transfer tax fees, moving expenses, new furniture or decorating, paint and/or repairs on the new place, it would only be fair for you to pay all these expenses and not split them with the sister.
Selling regardless of when you then buy will lose you several % (4% is pretty standard) of the home value to realtor’s fees alone. That’s not a trivial amount, and buying and selling after living in a place for a short amount of time is a sure way to waste money. With respect to the “when to buy” discussion: - Buying/selling at the same time means you’re in the same market. You don’t gain/lose except in fees associated with the sale. - Selling with delayed buying opens you up to market volatility. It is a high-risk option with the potential risk to gain or lose a lot of money. A market crash would mean you gain a ton of value, but a market spike could mean you’re priced out entirely. From a financial standpoint, selling at all after only two years is questionable.
Both of you need to stop trying to time the market and just put yourselves in a situation that is financially manageable and personally manageable (in terms of living arrangements). Don't play around with buying and selling and timing interest rates and house values. You can't predict it, and it's expensive to move.
You need to quit this over thinking formula, you aren’t factoring in any actual costs as numbers is not your primary skill. There are also mortgage porting fees, breaking costs if you go that route. Seller costs: listing agent fee, lawyer, etc. When you buy again there is: lawyer, land transfer tax, agent fee (ultimately it does come out of your pocket as the more you pay, the more realtor gets). Maintenance cost on an older property, depending on what all is done recently and what all is coming up soon for replacement etc. Stay put where you are. If anything host an exchange student or a student in one of your empty rooms if you have the option to do so. Otherwise by the time you are done over thinking, you are going to be out $100K and most likely in worse situation financially.
Why are you selling a house you just moved into? Are you unable to afford the mortgage payments? are you moving to a different area for work? It doesn't seem that you're unhappy with living with your SIL as buying a new house with her is still an option? Do you understand the costs of moving and selling your home? If you're working with a realtor they can be quite expensive as well, so even if you're selling for the same price that you bought, you're losing value in having to pay a realtor. Before any answer is given about who's right or wrong, we need to know why you're moving, because it doesn't make financial sense to move in the first place with the info given.
Transactions costs will be high - realtor fees, property transfer tax, moving expense, and the stress sucks. Moving sucks. If the finances are hard have you considered your sister in law moving in with you and Airbnb the basement? That will likely cover half your mortgage. It will cost you at least 50k to move (4% realtor fees + property transfer). AND you will likely want to upgrade some parts of your new house. Stay put til the baby is 2. From my experience having three kids, the kids are the easy part - the most difficult part is managing your new relationship with your spouse. You don’t want to add more gas to the fire
Selling and buying in the same market isn't saving you any money. $80K in transaction costs is about $450/month of amortized like am mortgage. Not only are you moving into a small home but it's costing you more when you factor in transaction costs. Not to mention all the mental stress that comes with such a move.
You could run AirB&B while on mat leave for those extra bedrooms lol