A native Californian transplanted in southern Illinois.To recap my situation, I bought my current house in November 2007 for 231,400. I put down 20% + closing, + had to make repairs out of pocket.
I feel regret pangs when I see what my home is worth today. It isn't so much the loss in value, it is the knowledge that had I waited a few years to buy, I could do so much better today.
Look at this place, in a very nice area:
Isn't it cute? It is the same size as mine now, with a smaller lot, in a better school district, with a community pool. 97k!!! If I were buying that today and putting the same amount of dollars down, I would have a mortgage of 51k. I would take a 15 or 10 year note, have smaller payments than I currently have, and be done paying YEARS sooner.
What a huge difference that would have made in my retirement plans!
Since time travel is regrettably not possible, there is nothing I can do about that. But I ponder, what CAN I do? Is there some way I can benefit from today's low home prices + low interest rates? Is there an opportunity here for me to add to my modest nest egg?
I am toying with the idea of seeing if I can qualify for an FHA loan, buy a house for 100k or so, rent out my current home, and wait for the day I can sell for enough to get out from under. FHA has a 3.5% + closing down 30 year fixed loan. I would have to pay PMI. I would need to scrape up 7k or so, which would have to come from a retirement account.
Of course, I would have to take a 30 year loan on the new place, not a nice 10 year loan. But the payments would be half of what I pay now. That is the advantage I see. The disadvantage I see is....I don't enjoy being a landlord.
In other news...I had another $2.43 available in my Lending Club account. I transferred and chipped it. I have less than $5 still owed to me, so Lending Club chips are approaching the end.
I sold a gift card on Plastic Jungle for $20. When I receive the check, I will chip that too.
March 24th, 2012 at 11:31 pm 1332631919
Do you really feel like you could afford two houses if the renters didn't pay like they should?
March 25th, 2012 at 02:13 am 1332641618
Have you run the figures for a re-fi to bring down the interest rate? Due to the way amortization tables work, you can cut years off your mortgage with regular, small extra payments directly off your principal.
If you have experience as a landlord, you know it can be a rollercoaster ride.
March 25th, 2012 at 03:14 pm 1332688489
March 28th, 2012 at 01:23 am 1332897823
And I don't have the cash. So for now, no.