What's the better route...keep existing house or buy cheaper house?

[Kimber6]

If you are 16 years in to a 30 year loan you will be amortizing more quickly. If you purchase a new home you will be starting over

[gayle39503]

Jim Thank you. I appreciate your advise.

[cschin4]

You need to look at your overall lifestyle. If you want to move, downsize, go to an apt. why not go look around and see if you actually find anything you like and if it really would save you money and then take your spouse to look. Also, you really don't know what kind of profit you will make on your home sale. It may be more or less than you think. And, moving itself is expensive.
But, buying a smaller home is not necessarily cheaper. It could need more repairs, not be as well insulated, etc. Your costs may not go down by all that much overall. But, if your home is too much house and you really aren't using it and aren't happy with it, then consider moving. But, trying to time the market is not the way to go. Home prices could also fall. There is no guarantee you will make more if you wait. IN fact, you could lose money or maybe homes won't be selling. Who knows? You don't know. You can only plan your life according to what you want to do now and what you think is best for your long term. If you would ENJOY moving and are in your 50's, why wait 5 more years? What would that accomplish? Do what is going to be best for your future. But, I think if you actually go look at what is available and price things out and see if there is anything appealing, it might help your decision.

[jIM_Ohio]

Jim: My hubby just started a new job and we dont have a clear picture of his income. He sells cars. My guess is, he will clear 3,000 a month and I clear 2200 a month. Our bills are 2800 a month (not including food and gas) which would be another $600 a month.

None of this tells me your behavior

focus on the questions I ask as my way of trying to see how you think about money, treat money, and handle financial problems "right now".

My post above...

depends- what would the $400/mo you save be going to.


I can see you want to create cashflow, if that cash flow would be spent on clothes, eating out, hookers and drugs, then it does not make sense (financially) to get the cheaper house (you will lose net worth, not create net worth).

Is your goal to
a) increase net worth
b) have more cash to spend
c) retire more comfortably
d) retire sooner

be very clear what the financial goal is- leave the emotional and he said/she said parts out... finances can cloud our judgement, so be very clear on your goal.

What is your monthly income? gross and net
what are your expenses (monthly and annual) only need totals, not itemized list
what is current balance of retirement accounts?
what are ages of two spouses living in home?

There are three factors here

1) is the numbers- what you asked about orginally- does it make sense from the numbers
2) What is your goal? Some people focus on the budget, some on retirement savings, some on net worth. What is your single, most important goal (if you achieved the goal, that is "success")
3) Is your behavior- does it need to change (behavior as it pertains to money). Are you spenders or savers.

1) and 2) could be correct and on the money, but with the wrong behavior, the whole plan falls apart.

If you were to move, then spend the extra $400/mo on eating out and clothes, then its a bad move, even if the numbers make sense initially.

[Stuartthomas]

i do not favor you to move to new house..till you don't have any payment problem ..otherwise i just think as your hubby ...and would like to advise you to stay here..for some more time..

[gayle39503]

Disney Steve; My family are builders. If you buy a new home, in a good area, good schools, the value usually goes up and you can make a profit. Since my family are builders, we have always built homes, sold them and built another one. If we had sold this house Im in after hurricane Katrina hit, it was valued at 172,000 as that is what some sold for in my subdivision. We paid 130,000 for it (family didnt build this one, their in Ohio). We would have made a nice profit, but we didnt want to sell then. Now its been appraised for 158,000 because of the slow market, not the best time to sell, but we will still make money...

[gayle39503]

Joan Of the Arch: I live 8 miles from the coast in a very nice subdivision. Homes sales are very slow here right now as they are everywhere. One good thing is all of the military bases here. They are always buying homes here.

[gayle39503]

Jim: My hubby just started a new job and we dont have a clear picture of his income. He sells cars. My guess is, he will clear 3,000 a month and I clear 2200 a month. Our bills are 2800 a month (not including food and gas) which would be another $600 a month.

[Joan.of.the.Arch]

You have a beach house on the Gulf coast? At the moment, I think it would be even harder to sell than the general real estate market makes it. People would view it as a risky purchase, what with the Deep Horizon gusher still unstoppable. Even if the oil flow were stemmed, how long would you have to wait to find out whether your beach will be undamaged?....Sorry, but I would not buy that house right now, unless perhaps at a negligible price. However, I suspect people who really do buy Gulf coast property have a different sense of risk than I do (no hurricane evacuations for me, thank you very much!), so maybe the market is better than I personally would guess.

[jIM_Ohio]

let me get this info together and Ill email it to you. My hubby started a new job, mostly commission and I need to get a figure from him.

BUMP

is reply coming?

[disneysteve]

I would love to sell my house and pay cash for my next house and save to move up every five years, but my wife would not.

I'll take your wife's side in this one. I can't imagine why anyone would intentionally want to move every 5 years. We've been in our home for over 16 years and I expect to be here for another 16 at least. Moving is right up there with root canal at the top of my list of things I don't ever want to do.

[gayle39503]

When the selling market is good, you can get ahead by selling every 5 years.

[maat55]

The way I see it is: We have 30,000 equity in our home. put it down on a house that cost 60,000-80,000. This brings the mortgage down to roughly 30,000(IF IT COST 60,000). The cost on 30,000 HOUSE note for 15 years would be 245.67, accounting to the mortgage calculator.

Currently our house payment is $1321.00 (minus taxes and insurance of 329.00 per month) which would bring me to $992.00 actual house payment amount. This is why Im considering selling this house, buy something alot cheaper to save money and hopefully save enough to just pay cash for a house!!!

Am I on the right track here?
Thank you ,,,,Gayle in Gulfport, MS

I would love to sell my house and pay cash for my next house and save to move up every five years, but my wife would not.

[gayle39503]

depends- what would the $400/mo you save be going to.


I can see you want to create cashflow, if that cash flow would be spent on clothes, eating out, hookers and drugs, then it does not make sense (financially) to get the cheaper house (you will lose net worth, not create net worth).

Is your goal to
a) increase net worth
b) have more cash to spend
c) retire more comfortably
d) retire sooner

be very clear what the financial goal is- leave the emotional and he said/she said parts out... finances can cloud our judgement, so be very clear on your goal.

What is your monthly income? gross and net
what are your expenses (monthly and annual) only need totals, not itemized list
what is current balance of retirement accounts?
what are ages of two spouses living in home?

let me get this info together and Ill email it to you. My hubby started a new job, mostly commission and I need to get a figure from him.

[jIM_Ohio]

The way I see it is: We have 30,000 equity in our home. put it down on a house that cost 60,000-80,000. This brings the mortgage down to roughly 30,000(IF IT COST 60,000). The cost on 30,000 HOUSE note for 15 years would be 245.67, accounting to the mortgage calculator.

Currently our house payment is $1321.00 (minus taxes and insurance of 329.00 per month) which would bring me to $992.00 actual house payment amount. This is why Im considering selling this house, buy something alot cheaper to save money and hopefully save enough to just pay cash for a house!!!

Am I on the right track here?
Thank you ,,,,Gayle in Gulfport, MS

depends- what would the $400/mo you save be going to.


I can see you want to create cashflow, if that cash flow would be spent on clothes, eating out, hookers and drugs, then it does not make sense (financially) to get the cheaper house (you will lose net worth, not create net worth).

Is your goal to
a) increase net worth
b) have more cash to spend
c) retire more comfortably
d) retire sooner

be very clear what the financial goal is- leave the emotional and he said/she said parts out... finances can cloud our judgement, so be very clear on your goal.

What is your monthly income? gross and net
what are your expenses (monthly and annual) only need totals, not itemized list
what is current balance of retirement accounts?
what are ages of two spouses living in home?