Of course, I left out the fact that I live in California, North of Sacramento – one of the hardest hit counties in the real estate plunge where everyone is holding on to their homes, if at all possible.
We paid $199,000 for this brand new home 10 years ago. The current mortgage is a 15 yr. term at 5% with a monthly payment of $1100.
So, to still live here and now pay $700/month seems like a bargain to me. Anything else comparable, whether a condo rental or smaller home mortgage will cost me $1500/month minimum and will not have the amenities I now have. I know I won’t have the maintenance either, but I love doing yard work for the exercise and I also do my own pool maintenance, as well, so I’m not pouring out money for lawn or pool care that most people do.
My children are still in college, one 2 hours away, the other 5 hours away, so for two more years, at least, I’d like to get to see them over holidays and vacations and the only way that is possible is if they come back to visit me in a place where there is enough room for that to happen. I know everyone says I should not make decisions based on the kids, but I’m leaning towards this path not really for them, as much as for me. My whole life has been turned upside down and at least having them around occasionally is providing some presence of family structure for me. I have no other relatives in this state and only a small circle of friends.
While I understand and appreciate all of your comments about selling the house, what puzzles me is this:
If I sell now, I can only hope to get $500,000, at best, in the current market, so after paying off the mortgage balance of $110,000 and closing/realtor costs, I net about $345,000. It is very difficult to find a $200,000 home where I live, but if I do, and I pay cash, I net $140,000 to invest, correct? I know this would mean I’d have no rent or mortgage, but with the pending change in my employment, I might need to relocate again in a year and that makes me wonder how practical a step this would be at this time. It seems better to get the new job and then make the housing decision after that task is accomplished and also when the housing market has begun to come back.
In my thinking, I would stay in the house until the market rebounds, however long that is, 5 to 7 years. If I can sell it for $650,000 at that time, I will net $540,000 less closing/realtor costs and walk with $480,000.
At that time, I will probably decide to just rent in an over 55 community or I may even relocate back East to my hometown or closer to the kids, wherever they end up. There are so many unknowns for me at this time; it is really hard to make a decision about what I want for my future, let alone on a day to day basis. I do know that moving is expensive and I don’t want to do it more than I need to.
I also realize that I need to take my emotions out of this decision, but that is so difficult when I’ve lost most of my identity and the roles that defined me, during the course of this divorce. The house is all that I have left that holds some part of who I was and who I am now. Again, I realize I can’t use it as a crutch and need to de-sensitize my connection to it, but that is a difficult thing to do.
Because I know little about investing and have only common sense to guide me, I really appreciate any additional thoughts you can offer to help me understand the most economical solution. You’ve already expanded my thinking in what you’ve posted so far and I am most thankful I decided to log on to this site.
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