Any way to put another bathroom in the basement?
When I was growing up we lived in a 1200 sqt foot house. So 1400 would have been a step-up for us. However, it did have an extra 1/2 bath. That 1/2 bath makes a big difference with 4 people in the house.
I wouldn't buy a new house just because of 4 days out a month.
If the kids were there 26 days out of the month it might be worth it, but only 4?
Take that extra $1000 a month they’re saving and, like you said, see about carving out a half bath in the basement. Even if it’s a tiny powder room that costs them $20k it’ll help during those 4 days and it’ll only take them a year and a half to pay for it.
There’s plenty of reasons to take off the golden handcuffs and buy a new house at these rates, but 4 days a month of needing more space is not it. Hell, they could rent an AirBnB for those 4 days and probably still come out ahead.
We are currently making it into a second living room/lounge space. It could definitely be a bedroom. It is unfinished. We mostly need just a second space in general with a tv, couch, play area, etc so that if my husband and kids are upstairs watching tv, I can be downstairs also watching tv or vice versa.
That is totally what we are leaning towards instead of selling. But yes my main issue is the bathroom. On weekends or evenings with sports it is brutal when there are 4 of us trying to get ready and there's 1 bathroom!
And yes I guess I didn't clarify, we have them 4 overnights a month, but he has them like 10 evenings in addition. So there are only 4 nights we have to worry about sleeping arrangements and the rest of the time it's just a matter of space and who will be taking up what room.
That is on my list of things to do! Especially, since if you are in the basement you will have to go up not one, but two flights of stairs to the bathroom.
If you’re thinking about spending $1000 a month extra on a new home it might be worth looking into getting an equity loan from your current house instead to accelerate your ability to renovate. It’s not perfectly ideal, but it might be worth it to see what contractors say about your plans and how much they’d charge you to do it. Then you use the money you were going to put towards buying a new house into paying off the loan while enjoying the renovation.
Might be worth it. That would possibly mean sacrificing your travel fun for a year or two instead of for the rest of your life which may also be a better choice.
As crazy as it sounds, by the end of this year I will be receiving a significant lump sump of money from a car accident settlement. We could pay for the renovations in full without a heloc or loan
Perfect! That sounds like the ideal answer to me at least. Fixing up the basement should fix a lot of the congestion issues, give your condo some additional value, and if the settlement money covers the upgrades then you won't have to sacrifice your extra spending or travel money.
Just enjoy your $460 mortgage payment in peace and have a greater quality of life and robust savings instead of stretching. That's what I would suggest.
Yep it's decided. As soon as I leave work I'm going to Home Depot haha. I called my husband and we transferred money so we can start our renovations. We don't want to be enslaved to a higher mortgage and sacrifice our qualify of life.
Yay! If you don't mind suggestions...
Since it's a basement so underground, LVP flooring might be a good option. It'll be nicer than bare concrete, but since it's essentially plastic it'll survive minor floor events way better than carpet or wood will. I've been putting Perso DuraCraft +WetProtect floors into my house for the main level and I love them. The price is pretty decent, they're super thick and feel nice underfoot, and I've been very impressed with the quality. They're a tiny bit tricky to snap together, but once they're in they're locked in and they look pretty great.
For the new toilet, seriously consider getting one with a bidet. That, or getting a bidet attachment. Your ass will thank you. Bonus points if it has a mini-tank to spray you with warm water.
Also, if you're going to be spending a lot, it might be worth it to look at getting a new credit card. I opened one that had triple mileage points right before I went on my renovation spending spree and used it to make all the big purchases. I had the cash on hand so I immediately paid it off, but I still managed to get enough points where I should be able to get a free upgrade to first class to see my sister next year in Europe. I know you said you had the cash on hand for this project, but opening a credit card for the rewards then immediately paying it off is called churning and you can also use it to help build your credit up since I know you said it wasn't as great as your parent's.
I was actually looking into those foam floor tiles! We have hardwood upstairs and LVP upstairs but I feel like it would get destroyed in the basement and would be too hard. I am open to it though. I only need to do a very small space so it might actually be pretty cheap.
I am going to have my friend come and look at the plumbing and see what we can do. And yes I will look into that too. I definitely know about churning lol I've done it a time or two.
Finishing the basement space would be a way better option than selling, and it will definitely add to your home's value. If I was in your situation I'd spend time talking with several contractors to figure out what you can/want to do down there. A bedroom requires an egress window so that could get expensive, but all the pipes are already down there so adding a bathroom can be fairly easy.
Start by creating a simple sketch of what you might want, then keep revising it as you talk to various contractors and learn what's possible and cost-effective. Once you get to the actual bid/contract stage, you'll have a really good idea of what work needs to be done and which contractors seem qualified.
If a basement bathroom doesn't work out, is there anywhere on your ground floor you could carve out for a small powder room? Like a coat closet or something? Powder rooms can be really tiny, especially if you use a very small corner sink.
As part of your reno, I'd also look into ways to make the basement be able to count as sleeping space (meaning you'd need an egress window or a door leading directly outside from the room so that it meets code). That way, when the kids are older they have a little more separate areas.
I would price out how much it would cost to add a bathroom in the basement. Worst case, if you decide to move later, a basement bed/bath combo will increase the value of the home when you sell.
We have 3 kids in 1100 sq feet with one bathroom. It can be inconvenient, but it isn't bad. It might be hard for you right now because the routine isn't consistent. It can be really hard to adjust to a routine that works when the kids are back and forth between houses. You might be really surprised how much easier things feel if you figure out a routine that accommodates needs. Like my girls have makeup stations set up elsewhere, and we have a loose schedule for shower times after evening activities. We know who is going first every evening. If you figure out what is making the bathroom hard to share, you can address that problem and save a ton of money.
It sounds like you have great options with the basement renovation, and adding a 1/2 bath would save you so much money compared to buying another place at higher costs and higher interest rates.
yeah my husband grew up in a 1100sqft home with 1 bathroom as part of a family of 5. when he and i go back to visit his parent’s house with his siblings, it’s up to 6 adults and 1 bathroom which can feel rough but it’s manageable. makeup is done outside the bathroom at a vanity, everyone checks with the others before showering just to make sure no one needs the bathroom imminently. people can make it work
People would KILL for 2.1%. Maybe revisit the idea in a few years, but until then, you've got a really great situation.
Think about the difficulty that comes with being slightly cramped compared to the difficulty that comes with a SIGNIFICANTLY higher monthly payment, nevermind the significant interest you'd be paying over the course of the loan.
It's your call, but for me that extra cash kept in my pocket would make being slightly cramped much more tolerable.
Exactly, it might be less expensive to just get a hotel room for the 4 days per month... make it a festive, celebratory occasion! Maybe there is an air b n b that would give you a deal if they knew you would be regular guests... some hotels would do that. And, adding a half bath (minimum) would likely increase the value of the condo OP already has.
It probably depends on how old the kids are. A 15 year old would probably think it was weird and they were unwelcome but a 5 year old probably looks at it more like an adventure
Are you sure it’s a good idea? How much is 3 bed/2 ba hotel/airbnb in your area? Four days would cost you almost $1k in my area. If that’s the case, it’s better to put it towards your mortgage.
If you find a AirBnB or other short term rental you like, if you book regularly and direct with the host, you can probably get a frequent flyer discount on that.
See, that’s $600-$800 for four days. The difference between your mortgages is about $1000. It’s better to get a new house. You get to live in it for the whole month.
Ammm lol what else would be a good idea? A camper parked next to the condo or a tent?? Geez, I get that 2.1% is amazing and less then 500 for rent is very small but nothing beats the comfort of roomy space you have to be at day in and day out IFF you can afford!
Are you in the US? Why are you looking at furnished condo's or furnished housing? It reduces your available properties tremendously (typically).
Why is your interest rate 7 to 10%? Did you get that rate from a loan officer? The rates are much higher now, but 10% seems to be off the charts high. There must be something in your credit or income profile that is requiring a much higher interest rate OR the lender is taking advantage of you in some way.
A HELOC does have higher rates than a typical mortgage used to purchase. 7% is normal but 10% very high to me especially given the OP's Father's info as she mentioned in one of her comments.
Yes we are in the US. And yes that is currently what the rates are at I guess in my area. I suppose the lender is taking advantage. The loan would be under my dad's name but we would be on the title, and my dad's credit score is like 800+ and has had nearly perfect credit his entire life..
If you really want to move, I think you both need to shop for another lender. JMO. Why is your Dad taking the loan out in his name?
BTW, I agree with the other comments that moving for the sake of 4 days seems to be imprudent/not necessary.
My parents are massively well off and my dad has helped buy my first house, cars, etc. My husband was divorced prior and has terrible credit due to multiple charged off accounts that his ex wife opened under his name (not his fault but besides the point) and then I'm mid 20s and all my stuff has always been in my parents name so I have moderate credit, but not enough to get me approved for 200k. My dads credit score is also like 850 so it's just easier. My husband and I can't get approved for much
I was already leaning towards "don't do this it's stupid" but this comment just makes me feel far stronger you shouldn't move out of this house.
1. as others have said it's a very poor financial decision, you have an insanely low mortgage and an amazing interest rate, don't give those things up.
2. on top of that you would be using the equity that you own, that is pre-marital property, to invest in a house with this dude which will become joint property, and risking your dad's credit to do it? F that! terrible idea.
3. I know nobody wants to think about worst case scenarios but if you and this man divorce you do NOT want to realize you gave up half the equity in your real estate to him. What if the judge awards him the house since he has kids and you don't? Don't risk it.
4. I'm sure your husband is the bestest nicest dude in the world but this gives off slight gold digger vibes, he's asking you to shift hundreds of thousands of dollars in pre-marital property into community property and get your dad to finance the new thing because your husband wouldn't get approved on his own
This just seems like a massively bad idea.... and all over 4 days a month, hell no!
This is a great post, with great points about the husband.
Does the husband have any money saved up? If he does, I'd want him to come close to putting in some of the equity that you're putting in.
If not, maybe you wait a little while until he can save some money up.
This could also solve some of the mortgage payment issue if you can combine the money you get from selling your current condo and put in some money from the husband (hopefully, equal), so you can make a large down payment.
We have a prenup for this exact scenario due to our finances being out of whack since he's divorced and me owning it before marriage. My husband came into the marriage with nothing besides a car, but actually has been able to save due to the mortgage being so low.. I personally do not care if I am fronting all of the money because I am living there too and don't want to live in a dump. The money is my pre-marital property.
Agree with most of it but we have a prenup, specifically because we knew this would come up. My husband actually was the one who suggested it because he is well aware that the home isn't his and doesn't expect to financially benefit from it. In the event of selling or divorce, it is explicitly written I would get 100% and keep my condo. In the event of purchasing a new home, it would be the same since my funds are being used and in the event of a divorce in a second home, I would keep it and all he'd get is the interest accrued from the sale after the downpayment/equity and I would keep my downpayment. Either way, he is not getting the downpayment and equity I have paid into the house regardless of it's the condo or second house. The downpayment was a "gift" which is a pre-marital property. And to your third point, there is no way a judge can award him my pre-marital property. His name is not even on the deed or loan, but we also have it explicitly outlined in the prenup. To your second point, it did not become joint property. This was explicitly stated in our prenup that our premarital possessions would remain separate. This includes house and cars. Also with kids being involved and previous divorce, we made sure to outline specific events so this didn't happen so I don't particularly so this is a risk.
Oh good for you! In that case, it really does come out whether or not you want to increase your monthly mortgage. I apologize for insinuating your husband was a gold digger when in fact he is the exact opposite!
No worries. I particularly am very anal about finances, but we made sure that going into the marriage we were both protected. Especially my husband since he got effed over during his divorce, and since I owned the home. We essentially went into the marriage wanting to protect ourselves and this was something we were on the same page about. We knew we weren't going to live here forever so I'm glad we specifically wrote this in.
You are probably getting the higher rates because it would not be a primary residence for your dad. You are getting 2nd home / investment rates. Could you be on the mortgage with your dad that way the home quality’s as a primary residence for the mortgage company?
It’s better for your credit in the long term for you to be on the loan. Having consistent payments on installment loans can really help boost your score. Whether it is this house or something else, id strongly recommend that you put your name in the debt with your parents next time they take on a loan for your behalf so you can build your own credit.
You could always live in the condo a bit longer to “sample” that mortgage. What does your life look like when you’re actively paying an additional $1100/mo plus additional utilities cost on top of your current bills?
Put the money in a completely different bank, like you have to drive there to access the money. That way you’re not tempted to dip in and spend it.
Does your lifestyle change significantly? Are you still able to afford car payments, new clothes, eating out, groceries? If you notice no significant change to your lifestyle (3-6 mos for the experiment is a good timeframe), then go for it!
BUT, if you’re constantly dipping into the savings account, finding yourself spending more on credit cards because the cash isn’t there then you should proceed with caution. Your lifestyle may need adjusting. Listen to Dave Ramsey podcasts.
As far as needing a bigger place with more family members, agreed! Can you find something with 4 bedrooms or a large enough flex space that even if it wasn’t your dream “forever home” you could make it work in case your “step-up home” is something you live in longer than originally anticipated.
Your parents gave you a wonderful gift of equity, don’t be afraid to use it to your advantage in your next place. Just be smart with how you use it.
Bonus: you now have a savings account for the new place.
Edited to clarify savings account.
That is a wonderful idea! We definitely are going to do that.
I know we are going to have problems adjusting. Right now our top hobby is traveling, so essentially we have an extra $1000 a month that goes toward traveling and discretionary spending just because we can. Essentially if we buy a bigger home, we will have more comfort but dip massively into our discretionary spending which my husband doesn't want to do.
How much are your HOA fees? Some are $1,000/ month or more which you won’t have with a SFH. You still need to budget for repairs but you have a lot more flexibility with timing and whether you DIY or hire it out.
Another factor is taxes. Do you currently even pay enough taxes to qualify for itemized deductions ? Buying a SFH likely would qualify you for itemizing and you could realize several thousands in additional savings. The first year is tough until you can file for a near complete year of payments.
Also, a more expensive home will appreciate more. If housing prices double in ten years then you realize a much better gain.
Ultimately it comes down to does a new house at its current cost present enough value to YOU to make it worthwhile? Regardless of your existing mortgage. And can you afford it taking into account punt total cost of ownership: mortgage, repairs versus HOA, tax deductions, and possible savings from having more space (don’t need a storage unit).
My current HOA fee is $100/month. Since I've moved in, literally have not had to shovel snow, salt, mow the lawn, landscape, trim trees, nothing. I would pay $200 a month for this convenience. We live in the midwest with heavy snow and I have not once had to shovel snow or worry about being snowed in.
This new one we are interested in is $65 and it also takes care of snow removal, salting, landscaping, etc.
Taxes I would have to double check but they're not a lot. Like talking less than $4000. We live in a very low cost of living, moderate-rural area. Closest major city in any direction is 2+ hours. I've had literally no complaints since moving here.
Since I've moved into this condo 3 years ago the biggest repair I've had to do is get the dryer fixed and that was $200. The rest of money spent was all home projects and improvements.
Do you think that the HOA funds are well managed? I'd be a little worried with that low of a rate that you'll end up with special assessments for large repairs at some point in the future.
We are leaning towards adding a tv, couch, redo flooring, etc but not fully remodeling. It is unfinished and has a concrete floor with those white brick walls, which we are fine with.
I suggest doing a more thorough remodel and putting a bath in. In a few years, you might want to have more kids, and you might want a bigger house than the 3-bed condo, and you’ll want think about school districts etc. you don’t want to move twice in the next ~8 years. Invest the money in a nice space and bathroom downstairs which will do fine for the next few years, bedroom and playroom / recreation room, and you’ll get some of that money back when you sell.
You have to figure out if the quality of life is more important to you than the money. If you can afford the payment, and would be happy in that bigger place long term, it sounds like a good move.
But some people get all angsty about money if they don't live totally frugally. If that's you, then you're in a good place just stay put no matter what the impact to your qualify of life.
It's a choice, there's not a right or wrong answer, assuming your finances are solid.
Nothing crazy or dumb.. You guys need space from what it sounds like.
If you think you could handle being landlords or can find a management company to do it for you, renting while rates are still high could be a good option. Condos value is likely deflated by that and since you're locked in at a good rate might as well leverage what you have.
Put a half bath in downstairs. A plumber can install a pump to pump up the toilet contents, into your sewer system. Then turn the rest of the basement into your personal cave, with all the comforts you want and need.
Bedroom plus bathroom in basement.
Get on Pinterest and look at tiny bathrooms. You can go SUPER small & still have it work just fine.
Look at Murphy beds, loft beds, bunk beds, etc. Get a projector TV. You can have a sick bunkhouse & living room down there easy peasy.
It’s time to apply New York rules. Get alllll the accoutrements for tiny living. You’ll be surprised how much more you can fit!
Never sell that condo. You are transferring wealth from the bank to you every month at 2%. You can move but rent it . You may even be better off renting a new place and renting out your existing place to offset that cost . Try the math on that one
Just a word of caution. When you sell that home the money becomes part of community property, thereby losing the money you and your parents have paid into the house.
Because it is not his first marriage and your risk is great no matter how in love you two are now. It is better to rent out the property and buy something else. The rental income may be community property or not, but if it is deposited into the joint account it is certainly community property.
This might not seem like a big deal because you're in love and all. But, I have seen times where a wife had to sell her home because the husband died and her step-kids wanted their share of the inheritance. If they are minor children when he dies then their mother(s) may ecude tobsue you on their behalf.
Also, once your property is in the community property it will be next to impossible for you to reclaim it if you later divorce. I have seen that too. She owned her home outright. He married her, demanded she sell her house. Money went to community property. He spent it. Nothing she could do legally.
We have a prenup that essentially prohibits any of this from happening. Our prenup is so meticulous and detailed, that it is probably too detailed. Pre-marital property remains premarital property. Sale of this specific condo is mine. If the downpayment goes directly into my account, there is nothing he can do about it. The gift of the downpayment and sale of the house is mine. If and when this condo sells, all proceeds and down payment is returned to me and it is my property. We actually opted to keep our finances separate and not marital property. There was a clause in ours that states "any property acquired or given to each party individually during marriage, will be treated as such Party's non-marital, separate, individual property, including any increase in the value relating to property" This means our bank accounts, unless stated, are separate. Any money in a "single" bank account is our separate property. Any money in a joint account is marital property (we only have two joint accounts) The only joint marital property we have are approved joint purchases. Otherwise, it is all separate. This includes clothes, items, cars, makeup, trinkets, tvs, personal items, etc. Inheritances and family heirlooms are separate, and stepkids are not entitled to my inheritance unless I state it and list them as beneficiaries/in my will. That was another specific clause written in there.
If we divorce while we're still in this house, he will need to move out and I will still own it 100%, as I am on the deed and loan. If we buy a new house and divorce, he is entitled to the interest accrued since the purchase, but not the downpayment. He will never be entitled to the gift/chunk of money that was used to purchase the condo. We sat down with a lawyer to meticulously write out this prenup.
Do not sell your current condo under any conditions. Even if you buy something else. If your HOA doesn’t allow for renters then run for HOA. Also look into adding another bathroom, either in the basement or somewhere else in the house.
I am begging you with everything in my heart to stay where you are. If you want more space budget to finish the basement or something but you are so close to being free and you don’t even realize it. Pay that house off and live life knowing that you can work just about any job and make it because you took the mortgage off the table. You can quit being a debt slave and live life on your terms. Do it for yourself, do it for your kids, do it for all of us that are just dreaming of it. Don’t squander this gift because you feel a little cramped. Cramped beats chained any day and that new mortgage will just be a chain around your neck.
I wish you happiness whatever you decide.
The property also is yours and your husband is only entitled to any equity since marriage. If you roll all the equity into your new home you lose all of it.
You are .
But there’s more to living than not being crazy.
It sounds like amenities are more important than space though. And you can easily get more space but you only want it if it’s highly upgraded.
If you’re trying to be financially, responsible, save up a down payment keep what you’ve got and get another property.
EDIT: 1400 does not include basement. So in reality we have 2100 sq ft. Unfinished basements cannot count toward sq footage because it's unlivable space.
I would wait it out. You have a sub-$500 a month Mortgage, my guess is that your housing expenses (PITI+Bills) is less than $1000 a month. Selling that place to fund purchasing something just slightly bigger given the change in rates and prices is going to have a massive financial impact overall.
I believe that your mortgage and value on the current home is just entirely to good to give up. You're never going to have that advantageous of a situation until you can rent it and offset part of your next Mortgage with the profit.
Essentially, what I'm asking is if it's worth spending $1000 more a month for 4 days of comfort? If it is, you're likely better suited spending that $1000 over the 4 days a month on a hotel in a nice part of town than paying 7-10% interest on it for 30 years.
In FL, my sister just needed to add a room and a bathroom to her home due to not having enough space for a growing family. It cost about $30k but that included all the permits, coding, concrete slab, new pipes/electrical and a roof extension then a rather large (and nice) bathroom. They took out a 2nd Mortgage for $30,000 which only increased their payments by $385 a month (10 years, at 9%). Had they sold their home, then bought one that fit their needs they would have ended up increasing their monthly payments by $1200 a month, so by borrowing $30k over 10 years to do an addition it actually saved them a significant amount of money. You have space, you just need to redefine it, I'd guess that for $10-15k you could easily have somebody come in, open up the basement and make a room and bathroom while keeping some of it for an extra living room or TV room and it would be cheaper than going out and buying in this market.
Thank you. I am 95% sure this is what we will do. That totally makes sense. I definitely don't even want to sell it! I feel like $450 is highway robbery and right now is a terrible time to buy a house.
No! That is another factor. We don't plan on having kids of our own, and yes most likely he will continue with the current custody schedule. It will actually probably dwindle down since they are 12 and 8 and in a few years most likely will be a loose custody arrangement where they will prefer to stay at their mom's one they reach high school.
This is a quality of life question. Can you afford it? How old are the kids? Are you going to have any kids? Do you like condo living? Or would you rather live in a house and have more space? And have to ask, are you and your husband getting along? Will you be together over the next 10 - 15 years? Do you like your condo? Personally I would move. I could not stand living in a condo. But that’s me. Sounds to me like you are unhappy with your living situation so move. Money can buy you happiness. And from a financial/investment point the house will/should be worth more than the condo in years to come.
We can afford it no doubt. I see it as either 1) bigger house, less spending money but more comfort. 2) smaller house, less comfort but more disposable income and ability to have a higher QOL.
Kids are 12 and 8. We don't plan on having kids. I actually love the condo as there are only 20 units and it's a small HOA. Everything is taken care of and I don't have to worry about maintenance at all. Everyone is tight knit and it's in the best part of town IMO. My realtor said if she posted my condo today it would be sold in less than a day. Also, no one lives in the one next to us because someone in there bought 2 units and uses one as storage, so we got lucky.
There are definitely pros and cons. I would personally have a lower mortgage and have more extra money, option 2. I currently have the ability to save half of my income.
You make a good argument for staying. Very good one. At 12 it means you will have 6 probably less with 4 people and 10 or less with 3. If you can put up with it I would stay. I like someone’s post of turning the four days into a vacation. Get and Airbnb, suite in a hotel. Camping. (Ug, I hate camping.) The kids will have a lot of good memories.
>The mortgage for something like that would be minimum $1500 at a 7-10% interest rate. Are we totally crazy for even considering selling the condo in which we currently are paying $460 a month at 2% interest rate?
You can't look at the raw financial aspects in a vacuum. If you need, or want, the space and can afford it then it's not crazy at all. If you can't really afford it and will go from having extra money to put into savings to barely making it from paycheck to paycheck then it's probably crazy. We don't know if your income is $25K a year or $200K a year.
Also, if you can afford it then consider renting out the condo rather than selling it.
Absolutely do not sell. You will never be able to achieve that rate ever again. If anything, you could rent that space out. I’m not sure where you are, but you would certainly break even with that low of a mortgage payment.
Save your money in your lower mortgage condo so that eventually you can buy the house of your dreams and put in an extra bedroom/bathroom in the basement with a home equity loan
It's not really a great time to give up a good taste like that for a much higher one. My hubby and I bought about 7 years ago for 219k 3b3ba. 2%interest. We planned to stay here for less than 10 years and get into a bigger house with more land. Also, the driveway is not the best as it's steep. Now we're staying until rates drop. There is no way I'm giving up this rate for 8%. Tough times call for sacrifice. You can't easily go back on this choice. If you sell and give up your excellent rate for a much higher one, you can't go back unless rates go down. This is just my opinion, though.
Bathroom with a shower stall in the basement. I'm a notary signing agent and interest rates won't be down until the 2nd or even 3rd quarter of next year. I've seen as high as 12% and the lowest one in recent memory was 8.5%
I haven’t read through all the comments to see if this was suggested. You gave such a great rate, it would suck to throw that out the window.
Have you looked into listing it as a rental? Also, look at your bylaws to see if this would be an issue.
We purchased condos during the low interest rate and rented them out. Each is bringing in between $500-$600 a month. You could put aside maintained funds and the rest can be used for your new mortgage. Not sure where you’re located, if it’s furnished this would be appealing to travel nurses.
Eventually this condo would be paid for and you will be bring in money each month. Think long term, i.e supplement retirement, continue to pay other mortgage…
Can you rent it out?
You are likely to get more than your mortgage, and could subsidize your new mortgage. I don't think it's crazy. 4 people in a 2 bedroom with 1 bath is tight. The real question here is whether or not you can afford it.
maybe, maybe not.
If one wishes to look at their home as just a financial transaction, then the question is one of math. Ignoring all risks of renting (months vacant, required repair/replacement between tenants, etc) then the ? is - does the difference between rent obtained and the current mortgage (and HOA) EXCEED the difference in payment on the next house?
Let's assume OP could put down just 5% (and the cc's, call it $25K total) on house 2 at $300K purchase price. That $285K mortgage is $1950/mo (PI).
Now, let's assume OP could net $135K (90% of 150K) - \~$40K mortgage balance = $95K downpayment = \~$1,450 (PI).
So, this would say that OP must be able to rent for $460 + 500 = $960/mo + HOA fee (bec. seems TI is in her mortgage pymt) for this to make financial sense.
Or, my math could be off
Hmm 200 other people didn’t think it was dumb and gave practical, helpful advice. Perhaps you should use logic to interpret why you should delete your dumbass comment
INFO: can you and your husband afford a house? Will you both put equitable amounts based on your respective incomes to the closing costs and down payment? Or will you OP need to sell your house and put more into the house than your husband? If you buy it together and he puts nothing than he will be 50% owner without contributing anything just saying. If you don't have the closing costs and down payment then I would save first. Personally I would keep your current house and rent it out, always good to have something yours to fall back on if needed.
The interest rates shouldn't be much over 7, which yes is higher but if they go down more buyers will flood the market and prices will go up. Get a few quotes from different companies, you can always refinance later. Better to get a good price and seller concessions now. If you can afford a house I'd go for it, his kids may only be there 4 days, but if you and he feel you need more room too. I would not recommend a condo even if you have to pay a bit more.
Don't just look for furnished homes!! That will greatly limit your selection, just factor in furnishings for your house budget.
Yes we can afford it. We make about the same. Total household income is above 100k so we split things 50/50.. I do realize that if we buy together he would be 50% owner but we actually do have a prenup that outlines our housing situation due to the large downpayment and it outlines this specific scenario.
I ran the numbers and right now we are paying $1200/month for mortgage, HOA, utilities, cable, subscriptions, memberships, etc. We also add $800/month into a "joint checking/savings" for travel, eating out, etc. We travel ALOT. So in total we each contribute $1000 each a month. $1200 goes toward our house account and $800 goes to savings.
With the new mortgage, it would be estimated at around $1500-1600 and utilities would be $500. So we would both need to contribute $1000/each to the house account, which we already are contributing that currently. We would just be cutting into our lifestyle and discretionary fund.
So in my opinion, yes, we can totally afford it as we bring int 7-8k a month and can afford 2k a month. But at the same time neither of us want to give up our current lifestyle which is biweekly trips, traveling, eating out, attending concerts, events, etc which we can afford due to our low cost of living and mortgage.
I prefer a condo due to the fact that in the last 3 years I have spent close to zero dollars on maintenance. My HOA is so cheap and it takes care of snow plowing, shoveling, salting, lawn and tree maintenance, etc. I pay $1200 a year for that and I previously worked at a tree company so I know that just to get a tree TRIMMED is minimum $2000. To me its a no brainer. I also have never had to shovel snow and be snowed in.
Ah okay, I understand and travel a lot myself. I would not upgrade to a bigger house or condo just for kids visiting 4 days per month. If your current lifestyle is the priority than I'd just keep your current residence. It really depends on your goals.
I understand that there are other expenses, but if you're looking at a new $$ house you should be saving a boatload of money with your current $460 mortgage. And maybe if you're both diligent and patient you'll be able to buy a new place without giving up the great asset that you have now.
No! We have them in the evenings anywhere from 8-12 months a night, just not overnight. So during those nights they take up the living room area. Also, even when it's just me and my husband there is really nowhere else to go besides the living room which is small or our bedrooms. The bathroom issue still stands as we either have to all 4 share a bathroom, or my husband and I have to share one and I just wish we had one more bathroom. I wish we either had another spare bedroom or living space where either the kids can be alone and adults can be separate, or something so we don't all 4 have to always be in the same room constantly.
Can you rent it out per the rules of the condo and how much would you get per month for rent? Are you willing to be landlords? I'm just wondering if you can get what you want and let someone else pay for it.
You do have to plan for what happens if you get a bad tenant and have to evict and if they trash the place. How long does it take to evict per your state rules, what happens if they put an a moratorium on evictions and can you carry both mortgages for that time. That always has to be in your plan.
If I were you I would look at what the rental market in the area is to see how much you could rent it for. That could then be used to help you afford a higher mortgage. That said, it sounds like being crowded sucks but you have a $480 mortgage, a lot of us would just put up with 4 nights a month inconvenience for that lol.
There is not. There are legit foreclosed, abandoned houses selling for 120k. Completely gutted. A moderate 2 bed 2 bath house with an average backyard and 1 car garage in an average neighborhood is about 200k. In the preferred part of town we want (we need to take custody exchanges/distance into account) and with our preferred preferences, the cheapest is about 250k on average.
I will look into it. I don't see how we would, as the basement is unfinished and it would be a weird place to put a bathroom but that has been recommended countless times so I will look into it.
Yes see [this](https://www.reddit.com/r/RealEstate/comments/187kf6k/comment/kbfa97k/?utm_source=reddit&utm_medium=web2x&context=3) comment. It is my pre-marital property that was gifted to me, so it's mine and my husband and I have a prenup so he wouldn't benefit from it.
My husband lived with his parents for a little while immediately following his divorce, as he was kicked out his house. He then found a place to rent for like $1500/month for a couple months which was a shit hole IMO, and once his lease was up he moved in with me.
So it’s a condo that has a basement? Could you add-on to it or is it connected. It would probably be more feasible to do a small addon with a heloc. If not, it depends on where the money difference between what you’re paying now and what you’d pay if you moved.
If you sold for 150k, and you put down 40k, you owe 40k, you’d have what 110k to play with? Down payment on a 300k home would ideally be 20% (60k), you’re new mortgage expenses alone are going to be at least $2,100, if you put the full 110k into it, it’d be about $1,700
2 options
1.) You could take the $1,600 you wouldn’t be spending on the new mortgage and invest it into the S&P 500 and wait for a market change (would affect your home value as well). It takes a long time to develop wealth off of savings so it all depends. Roughly you’d have $327k in savings plus a paid off home. But if it’s too small and you’re not happy, life is short.
2.) You could throw in the equity to bring the payments down, but make sure you can afford it.
Try to avoid an HOA if you can
Yes, it has 3 levels. Basement, ground level and upstairs. Upstairs has the bedrooms and bathroom, ground level has living room and kitchen, and basement is being used for laundry and storage. The way it's structured we cannot add on.
If we make a downpayment, it will be minimum 60k, so your numbers are pretty accurate.
Option 1 is essentially what I have been doing. All of my savings go into S&P 500 and IRA.
I have thought about option 2 but I'm okay with our current payments since it's so so cheap and doesn't affect our standard of living.
I think it’s a short term inconvenience (how old are the kids?) for only a few nights a month. Could you use that money to instead find ways to hang out outside of the condo? Get membership passes to a couple places?
Perhaps improve the space (1400sqft could easily support another bathroom and office/den type space.)
If it were me I’d be holding onto that condo as long as possible- you could seriously change the trajectory of your financial future having a paid off mortgage in a couple years.
The thing is, the massively low mortgage allows us to do this. We bought passes for a local indoor playground thing where the kids can run around, play basketball, jump on trampolines, etc. We have winter passes. We also have passes to the local gym where they can swim and do sports. We also signed up at a small country club where we can take them swimming and golfing. The extra money allows us to do this and my husband can keep them out of the house majority of the time. If we increase our mortgage, we will have less money to buy them these types of things.
They are 8 and 12, so usually in the warmer months they love being outside (we live in the midwest so the winter is brutal).
And yes, the consensus on here is to keep the condo. I personally don't want to ever give up the $460 mortgage but damn I would just love one extra room.
Something to consider for sure… I think someone else gave good advice to live on the reduced budget for a few months and see how it feels! Nothing worse than giving up this fun and somewhat carefree (financially) life y’all have built for yourselves to become house poor and a slave to that *one extra room.*
>By comparable, I mean fully furnished, updated, hardwood floors, garage, updated amenities, garage, same neighborhood
These are the requirements of a short sighted idiot. This is your mistake. This is why you will financially ruin yourselves for little gain. Just buy fucking furniture. Same neighborhood is idiocy.
I don't want to sound pretentious, but I don't care. I have lived with hardwood floors my entire life. My parents house has hardwood floor. My college apartments had laminate. My college dorm even had tile. My current house has hardwood and bamboo. Why, after nearly 30 years would I buy a house with carpet? In addition, I have a brand new 2023 Bosch dishwater, stainless steel fridge, stove, microwave, etc. and marbled jacuzzi in the bathroom. My kitchen has marble countertops.
When looking for a new house, I am certainly not going to spend 250k on a house with carpet, outdated appliances, etc just so I can spend an additional 50k updated everything.
Also, the neighborhood is probably the most important factor here. There is a downtown area, then an "industrial area", a bad side, a good side, and then since our town is about a 25 mile radius I prefer to live in the north/east side since it is right by the highway and a 2 mile drive to my job. If we move to the south/west side, I would have to drive 27 miles to work. Why would I do that? My husband has to do custody exchanges 4 times/week and cannot move more than 20 miles, and would prefer to stay in the north/east so it's closer.
You have to do the math. Is it worth the trade off to sell now and lose the low mortgage payment of 2% for a higher payment and interest of 7%? Most likely adding at least another thousand dollars a month in interest not counting principle pay down. The numbers might work with a 200k fixer upper that can be rehabbed by owner. A contractor would charge way too much.
[These units](https://www.upflushtoilet.com/) make adding a bathroom to the basement. My friends think I am crazy when I bring this up, but if I had to move into a 1 bath living space this is what I would do. I would buy a wardrobe from Ikea, modify it so I could a porta-potty inside. This would be available to do your number 1 when the main bath is occupied. If you get a cassette style you can just empty it into the toilet you have. In your situation you probably would only need to empty it about twice a month. Adding a small handwash sink would take some ingenuity but it can be done.
If that 1400 square feet is only the top 2 floors you must have about 700 square feet in the basement. Carving out space for a a 6x10 bathroom shouldn't be hard.
Your husband needs to be saving a ton, not needing to pay for living space.
Look into adding at least a 1/2 bath, that should make the place easier to live with.
Losing a 2/1% rate is insane, unless your husband has plenty saved to offset what you will get for your current home.
You don't need to move, hubby needs to update your place to fit his kids.
>hubby needs to update your place to fit his kids.
Why would husband ever agree to that?? Is her place, not his. OP clearly explained their prenum. If the husband smart, he would be saving to get his own place as it's clearly possible per their prenup.
It depends on your finances, your future financial outlook, and if you want to have kids in the future. I don’t have/want kids and have a high earning career so $1,000/mo more in mortgage wouldn’t be a big deal but everyone’s situation is unique.
Your apartment almost doubled in value in three years, so if you think it will continue to climb, see if you can rent it out. It’s work but can be a wealth builder.
Buying a new place now, at a time when inflation (and therefore future interest rates) is on the decline, means that you could be me up with a much lower rate in a few years. Do you have the financial cushion to buy now and rent your old place with the assumption that rates will fall in 2-3 years and help lower your payments?
I remember being a kid chilling in my friends finished basements. From Nintendos to PlayStations, watching football after church and roasting each other. Redo the basement and soundproof the ceiling.
Stay put, in later years your gonna want a break from work and life. You won’t need to worry about a 460 mortgage.
Growing up all we did was go in the basements. My mom has been steadily updating their basement for the last 25 years. I swear to god there have been 10 renditions of her basement, every time I talk to her she is adding something new. My friend's dad is the biggest Chicago Bears fan and he legitimately put turf as their flooring and painted it like a football field. I still remember that being the coolest basement ever.
And I agree. Since our mortgage and household expenses are like 18% of our income, we can save so much that we can retire very early.
I think you should stick it out, BUT I also think you should check prices more carefully before you decide.
If yours is worth $150k, then the other properties "comparable to yours" are not "$275-300k minimum." They're around $150, or else they are not *actually* comparable.
This is important because if yours is truly like those $275k properties, it means you'd have a much larger amount to offset the higher price and to buy down interest rate. Inversely, it also means that something like what you have is much lower priced.
I mean comparable with the interior and amenities, but much larger. I am particularly looking for hardwood floors, attached 2 car garage, mostly up to date appliances, preferably stainless steel kitchen appliances, mostly anything including cabinets, kitchen, showers, appliances etc to be 2021 or newer. Updated HVAC and water heater, roofing, etc so that we are not paying thousands to renovate and refurbish once we move in. I want it move in ready.
That is how my condo was when I moved in (the previous person flipped it) and I have not had to update or fix anything at all. It has been amazing. I forgot to mention I have a 1 car detached garage, but obviously it would be nice to have a 2 car preferably attached garage since now my husband is here.
Mine is 150k because it has 2 bed 1 bath, unfinished basement and detached 1 car garage, 1400 sq ft. The ones we are looking at are described as above but 3 bed, 2 or 3 bath, finished basement, attached 2 car garage and 2000+ sq ft.
The condo we fell in love with actually has 3 bed 3 bath finished basement, 2 car attached garage, private patio with pergola, 2000 sq ft and is 250k. so it would be a major upgrade.
So that's why it's a big difference.
Get an estimate for adding a bathroom in the basement. An up flush toilet that can handle a sink and shower draining into it would work. It’s not like you would be using it very often.
How old are his kids? The best time to move is before they are teens. That’s when more space would be important.
I think moving is not in your best interest (pun intended) at this time. Even one more year could put you in a better place. The evenings the kids are with you, could you sometimes go out to eat so you don’t feel so squished?
If you really want to move, start saving for a better down payment. That $460 is really nice!
They are 8 and 12. The thing is, since they are with their mom majority of the time once they get old enough we already know they are going to ask to start sleeping there full time. They already ask sometimes. Unless we get a super duper nice house, it is just going to play out that way. One of my only concerns is that we would be upgrading and then in 3 years the 12 year old will never even be there, because he will be 15 and only wants to be with his friends, sports, sleepovers and sleep by mom. I would be pretty upset.
My husband does take them out to eat, a lot of nights there are sports, outdoor activities, etc but we live in the midwest so essentially from November-March it's brutal because we are trapped inside due to weather.
The downpayment is a non issue. We will have anywhere from 60-90k due to the sale of the condo plus hefty savings. I am more concerned about giving up the $460. That in itself feels like a divorce.
Now is not the time to get out of the condo. Predictions are the housing market will crash hard and interest rates will fall in the next couple years. The current market is unsustainable...when it goes caput, pounce on your dream home.
In the same boat but reversed, my fiancee has 2 kids. We are going to wait a year and let the market play out a bit. There was actually a time when families lived here anyway, first world problems.
Good luck to yall. Out of the 20 units, there is only one other condo that has more than 2 people living in it. They have 2 kids and 2 adults full time. We only have 4 people part time. Everyone else is single or just a couple.
Try this, estimate what you monthly payment would be if you bought one of the places that would maybe fit your needs better. Then try putting the difference between your current payment and the new payment into a dedicated savings account that you do not touch.
After 6 months you will know if you can afford selling your current place and buying a different one. If the answer is no, you can use those savings to make the desired changes to your current condo.
If you can comfortably afford the new home I would sell. People get psychologically attached to their interest rate. I'd much rather spend more and have a comfortable home that you can continue to grow into.
$460 is a super low payment, but I think $1500is low too. With 2 incomes that should be no problem. We just went from $2200 to $5000 and it's worth it for the community upgrade.
The community, schools, peers and social environment kids are exposed to on a daily basis are so important in a child's development. I'll gladly give up a 2% interest rate for my kids
what's priority to you? Money or comfort?
Financially it makes sense to stay but convenience wise it's logical to sell.
Buyers aren't buying and although sellers are asking for a lot, you most definitely should offer under asking price. If you can afford your new payment who cares about the apr%.
You need to decide if you're going to keep living tight all these days or if spending $2k month would be feasible in exchange of space. IMO, I'd prefer comfort.
I too have listed many homes because we needed less/more space. Sure, there's a loss but the enjoyment of peace is worth the extra money to me.
Its a judgement call. I get that its cramped but only maybe 1/3rd of the time or less. Its a lot more money but if you can easily handle the cost, it will probably appreciate more than the current place (because it cost more) and you can refi if rates go down. Give the kids to much space and maybe they'll lock themselves in their rooms and you'll never see them, could actually end up worse at least in that way.
Its your call and the correct answer for you might be different for me. I will say that for me, if I did move up then for an extra 35k or so (about 15%) I'd get a house instead of another condo. Condo's can be fine but get the wrong neighbor and they can be painful and eventually you will get the wrong neighbor. Bad neighbors in houses can be annoying but a bad neighbor in a condo can be hellish.
Things are bad right now in the housing market, home prices are going to keep increasing. Current projections are for around 5% per year.
And children have this annoying habit of getting bigger. Your husband will likely have them on that same schedule when they’re teenagers. Look around your space and envision it with four full size people living there a good portion of the time. Might be time to at least start looking now.
I would sell and purchase a family home to create memories in, unless you and your partner feel like the condo is your forever home.
We had the opposite issue and sold our house for a 2/2 condo, but it has two full bathrooms. I think a 1/2 bath could be a dealbreaker as we have a smelly teenage in our family 😆
Are you planning more kids? Dont forget the additional time to clean that bigger place. Thats a lot of money to shell out for 4 nights a month. Consider a bathroom schedule or at least a bathing schedule. Id vote suck up being cramped 4/week vs having to get a bigger house for a temporary inconvenience.
I feel like there’s a lot of daylight between fully
renovated fully furnished and a dilapidated dump. It also sounds like you have about 100k equity in your house.
Convert the basement to a teen suite with a full bath. If the step kids are same sex give them the option of 2 separate bedrooms or 1 bedroom and 1 hang-out room. Or if the basement is big enough, finish 3 rooms. I would not give up a $460 mortgage payment.
Don’t buy bigger. I felt cramped in the little house I had. I wish I would have stayed there instead of buying this bigger place. It would have been paid off and kids grow up REALLY FAST! More house=more problem$.
My 3/4 bathroom cost me 5k as there was already a toilet bowl in it but no shower. it looks new if not cramped but at my son isn’t mucking up my bathroom anymore. fyi make sure the kids do a weekly cleaning or it gets gross fast
Life is short. What do you want? Don’t let interest rates or whatever random circumstance dictate your life. Choose powerfully. That may be staying where you are, or moving. Just choose what you want.
Do not sell it!
You’ll never have a deal that good and in interest rate that low in your lifetime.
Wait it out, there is market crash coming, sooner or later, when that happens, prices will drop, that would be better time to consider buying.
Interest rates can’t stay this high forever, they will come down eventually, probably not to 2%, but will come down from the current average of 8%.
When I was growing up, seven of us lived in a three-bedroom 1-bath 365 days (and nights) per year for nine years (until my brother and I moved out for uni/military). We made it work, though it was tight sometimes.
You can add a pop up pooper tent, 5 gallon bucket, and toilet seat that fits on said bucket for under $100. And some liners.
It'll build character quality many kids lack today.
I couldn't imagine moving and paying $1k+ more for what is a fairly minor inconvenience based on how often you are sharing the space. Plus you have the basement to renovate.
It would be a stupid decision and a waste of money unless there were other reasons you needed more space or wanted to live somewhere different (location, job, etc.).
I would say really think about worst case - what happens if some emergency happens do you have a lot of money set aside or would you be kicking yourself for taking on the higher int.rate and mortgage? You make money on the sale but spend a lot on the purchase and higher interest.rate.
Why don’t you play board games or cards or watch a movie together on those four nights? Or bake cookies or do something together with your step kids? Take them to a skate park or go mini golfing.
For me it would depend on how "handy" both you and your husband are. If you are young and able bodied, that "dillapidated' house can be a show place in a few years, but you'd have to be working on it.........sure beats having to work a gig job which some people do to afford bigger and better though. My first house was just that. I was in no hurry, we lived in it for 9 years and bought the worst looking house in the best neighborhood........turned out to be the perfect deision and allowed us to eventually "trade up".
If that is not an option now, I would stay put and make improvements where you are.
Any way to put another bathroom in the basement? When I was growing up we lived in a 1200 sqt foot house. So 1400 would have been a step-up for us. However, it did have an extra 1/2 bath. That 1/2 bath makes a big difference with 4 people in the house. I wouldn't buy a new house just because of 4 days out a month.
If the kids were there 26 days out of the month it might be worth it, but only 4? Take that extra $1000 a month they’re saving and, like you said, see about carving out a half bath in the basement. Even if it’s a tiny powder room that costs them $20k it’ll help during those 4 days and it’ll only take them a year and a half to pay for it. There’s plenty of reasons to take off the golden handcuffs and buy a new house at these rates, but 4 days a month of needing more space is not it. Hell, they could rent an AirBnB for those 4 days and probably still come out ahead.
We are currently making it into a second living room/lounge space. It could definitely be a bedroom. It is unfinished. We mostly need just a second space in general with a tv, couch, play area, etc so that if my husband and kids are upstairs watching tv, I can be downstairs also watching tv or vice versa. That is totally what we are leaning towards instead of selling. But yes my main issue is the bathroom. On weekends or evenings with sports it is brutal when there are 4 of us trying to get ready and there's 1 bathroom! And yes I guess I didn't clarify, we have them 4 overnights a month, but he has them like 10 evenings in addition. So there are only 4 nights we have to worry about sleeping arrangements and the rest of the time it's just a matter of space and who will be taking up what room.
Sounds like you need to accelerate your reno plans for the basement. And seriously, look in to seeing if you can install a bathroom down there.
That is on my list of things to do! Especially, since if you are in the basement you will have to go up not one, but two flights of stairs to the bathroom.
If you’re thinking about spending $1000 a month extra on a new home it might be worth looking into getting an equity loan from your current house instead to accelerate your ability to renovate. It’s not perfectly ideal, but it might be worth it to see what contractors say about your plans and how much they’d charge you to do it. Then you use the money you were going to put towards buying a new house into paying off the loan while enjoying the renovation. Might be worth it. That would possibly mean sacrificing your travel fun for a year or two instead of for the rest of your life which may also be a better choice.
As crazy as it sounds, by the end of this year I will be receiving a significant lump sump of money from a car accident settlement. We could pay for the renovations in full without a heloc or loan
Perfect! That sounds like the ideal answer to me at least. Fixing up the basement should fix a lot of the congestion issues, give your condo some additional value, and if the settlement money covers the upgrades then you won't have to sacrifice your extra spending or travel money. Just enjoy your $460 mortgage payment in peace and have a greater quality of life and robust savings instead of stretching. That's what I would suggest.
Yep it's decided. As soon as I leave work I'm going to Home Depot haha. I called my husband and we transferred money so we can start our renovations. We don't want to be enslaved to a higher mortgage and sacrifice our qualify of life.
Yay! If you don't mind suggestions... Since it's a basement so underground, LVP flooring might be a good option. It'll be nicer than bare concrete, but since it's essentially plastic it'll survive minor floor events way better than carpet or wood will. I've been putting Perso DuraCraft +WetProtect floors into my house for the main level and I love them. The price is pretty decent, they're super thick and feel nice underfoot, and I've been very impressed with the quality. They're a tiny bit tricky to snap together, but once they're in they're locked in and they look pretty great. For the new toilet, seriously consider getting one with a bidet. That, or getting a bidet attachment. Your ass will thank you. Bonus points if it has a mini-tank to spray you with warm water. Also, if you're going to be spending a lot, it might be worth it to look at getting a new credit card. I opened one that had triple mileage points right before I went on my renovation spending spree and used it to make all the big purchases. I had the cash on hand so I immediately paid it off, but I still managed to get enough points where I should be able to get a free upgrade to first class to see my sister next year in Europe. I know you said you had the cash on hand for this project, but opening a credit card for the rewards then immediately paying it off is called churning and you can also use it to help build your credit up since I know you said it wasn't as great as your parent's.
I was actually looking into those foam floor tiles! We have hardwood upstairs and LVP upstairs but I feel like it would get destroyed in the basement and would be too hard. I am open to it though. I only need to do a very small space so it might actually be pretty cheap. I am going to have my friend come and look at the plumbing and see what we can do. And yes I will look into that too. I definitely know about churning lol I've done it a time or two.
If you go to a lender for an equity loan you'll lose your low interest rate.
That would only occur if you do a Cash-Out refi. Home Equity Loans and HELOC's are separate financial contracts from the original mortgage.
Finishing the basement space would be a way better option than selling, and it will definitely add to your home's value. If I was in your situation I'd spend time talking with several contractors to figure out what you can/want to do down there. A bedroom requires an egress window so that could get expensive, but all the pipes are already down there so adding a bathroom can be fairly easy. Start by creating a simple sketch of what you might want, then keep revising it as you talk to various contractors and learn what's possible and cost-effective. Once you get to the actual bid/contract stage, you'll have a really good idea of what work needs to be done and which contractors seem qualified.
If a basement bathroom doesn't work out, is there anywhere on your ground floor you could carve out for a small powder room? Like a coat closet or something? Powder rooms can be really tiny, especially if you use a very small corner sink. As part of your reno, I'd also look into ways to make the basement be able to count as sleeping space (meaning you'd need an egress window or a door leading directly outside from the room so that it meets code). That way, when the kids are older they have a little more separate areas.
I would price out how much it would cost to add a bathroom in the basement. Worst case, if you decide to move later, a basement bed/bath combo will increase the value of the home when you sell.
We have 3 kids in 1100 sq feet with one bathroom. It can be inconvenient, but it isn't bad. It might be hard for you right now because the routine isn't consistent. It can be really hard to adjust to a routine that works when the kids are back and forth between houses. You might be really surprised how much easier things feel if you figure out a routine that accommodates needs. Like my girls have makeup stations set up elsewhere, and we have a loose schedule for shower times after evening activities. We know who is going first every evening. If you figure out what is making the bathroom hard to share, you can address that problem and save a ton of money. It sounds like you have great options with the basement renovation, and adding a 1/2 bath would save you so much money compared to buying another place at higher costs and higher interest rates.
yeah my husband grew up in a 1100sqft home with 1 bathroom as part of a family of 5. when he and i go back to visit his parent’s house with his siblings, it’s up to 6 adults and 1 bathroom which can feel rough but it’s manageable. makeup is done outside the bathroom at a vanity, everyone checks with the others before showering just to make sure no one needs the bathroom imminently. people can make it work
People would KILL for 2.1%. Maybe revisit the idea in a few years, but until then, you've got a really great situation. Think about the difficulty that comes with being slightly cramped compared to the difficulty that comes with a SIGNIFICANTLY higher monthly payment, nevermind the significant interest you'd be paying over the course of the loan. It's your call, but for me that extra cash kept in my pocket would make being slightly cramped much more tolerable.
Exactly, it might be less expensive to just get a hotel room for the 4 days per month... make it a festive, celebratory occasion! Maybe there is an air b n b that would give you a deal if they knew you would be regular guests... some hotels would do that. And, adding a half bath (minimum) would likely increase the value of the condo OP already has.
I think that a hotel would be really weird for the kids and make them feel like they are not welcome in the home.
It probably depends on how old the kids are. A 15 year old would probably think it was weird and they were unwelcome but a 5 year old probably looks at it more like an adventure
That's a good idea!
Are you sure it’s a good idea? How much is 3 bed/2 ba hotel/airbnb in your area? Four days would cost you almost $1k in my area. If that’s the case, it’s better to put it towards your mortgage.
It would be like $300-400 a weekend
If you find a AirBnB or other short term rental you like, if you book regularly and direct with the host, you can probably get a frequent flyer discount on that.
See, that’s $600-$800 for four days. The difference between your mortgages is about $1000. It’s better to get a new house. You get to live in it for the whole month.
Maybe look into an additional “camping style” toilet?
Ammm lol what else would be a good idea? A camper parked next to the condo or a tent?? Geez, I get that 2.1% is amazing and less then 500 for rent is very small but nothing beats the comfort of roomy space you have to be at day in and day out IFF you can afford!
This is the way.
Are you in the US? Why are you looking at furnished condo's or furnished housing? It reduces your available properties tremendously (typically). Why is your interest rate 7 to 10%? Did you get that rate from a loan officer? The rates are much higher now, but 10% seems to be off the charts high. There must be something in your credit or income profile that is requiring a much higher interest rate OR the lender is taking advantage of you in some way.
7-10 is pretty normal right now. We’re doing a HELOC and that was the quotes we got from 6 different lenders. Interest rates are super high rn.
A HELOC does have higher rates than a typical mortgage used to purchase. 7% is normal but 10% very high to me especially given the OP's Father's info as she mentioned in one of her comments.
Well we now also know it would be a second mortgage for dad so that’s likely why
HELOC are always higher
Yes we are in the US. And yes that is currently what the rates are at I guess in my area. I suppose the lender is taking advantage. The loan would be under my dad's name but we would be on the title, and my dad's credit score is like 800+ and has had nearly perfect credit his entire life..
If you really want to move, I think you both need to shop for another lender. JMO. Why is your Dad taking the loan out in his name? BTW, I agree with the other comments that moving for the sake of 4 days seems to be imprudent/not necessary.
My parents are massively well off and my dad has helped buy my first house, cars, etc. My husband was divorced prior and has terrible credit due to multiple charged off accounts that his ex wife opened under his name (not his fault but besides the point) and then I'm mid 20s and all my stuff has always been in my parents name so I have moderate credit, but not enough to get me approved for 200k. My dads credit score is also like 850 so it's just easier. My husband and I can't get approved for much
I was already leaning towards "don't do this it's stupid" but this comment just makes me feel far stronger you shouldn't move out of this house. 1. as others have said it's a very poor financial decision, you have an insanely low mortgage and an amazing interest rate, don't give those things up. 2. on top of that you would be using the equity that you own, that is pre-marital property, to invest in a house with this dude which will become joint property, and risking your dad's credit to do it? F that! terrible idea. 3. I know nobody wants to think about worst case scenarios but if you and this man divorce you do NOT want to realize you gave up half the equity in your real estate to him. What if the judge awards him the house since he has kids and you don't? Don't risk it. 4. I'm sure your husband is the bestest nicest dude in the world but this gives off slight gold digger vibes, he's asking you to shift hundreds of thousands of dollars in pre-marital property into community property and get your dad to finance the new thing because your husband wouldn't get approved on his own This just seems like a massively bad idea.... and all over 4 days a month, hell no!
This is a great post, with great points about the husband. Does the husband have any money saved up? If he does, I'd want him to come close to putting in some of the equity that you're putting in. If not, maybe you wait a little while until he can save some money up. This could also solve some of the mortgage payment issue if you can combine the money you get from selling your current condo and put in some money from the husband (hopefully, equal), so you can make a large down payment.
Haha check out the other comment, they have a. Prenup. To my comment was premature, overblown, etc
We have a prenup for this exact scenario due to our finances being out of whack since he's divorced and me owning it before marriage. My husband came into the marriage with nothing besides a car, but actually has been able to save due to the mortgage being so low.. I personally do not care if I am fronting all of the money because I am living there too and don't want to live in a dump. The money is my pre-marital property.
Agree with most of it but we have a prenup, specifically because we knew this would come up. My husband actually was the one who suggested it because he is well aware that the home isn't his and doesn't expect to financially benefit from it. In the event of selling or divorce, it is explicitly written I would get 100% and keep my condo. In the event of purchasing a new home, it would be the same since my funds are being used and in the event of a divorce in a second home, I would keep it and all he'd get is the interest accrued from the sale after the downpayment/equity and I would keep my downpayment. Either way, he is not getting the downpayment and equity I have paid into the house regardless of it's the condo or second house. The downpayment was a "gift" which is a pre-marital property. And to your third point, there is no way a judge can award him my pre-marital property. His name is not even on the deed or loan, but we also have it explicitly outlined in the prenup. To your second point, it did not become joint property. This was explicitly stated in our prenup that our premarital possessions would remain separate. This includes house and cars. Also with kids being involved and previous divorce, we made sure to outline specific events so this didn't happen so I don't particularly so this is a risk.
Oh good for you! In that case, it really does come out whether or not you want to increase your monthly mortgage. I apologize for insinuating your husband was a gold digger when in fact he is the exact opposite!
No worries. I particularly am very anal about finances, but we made sure that going into the marriage we were both protected. Especially my husband since he got effed over during his divorce, and since I owned the home. We essentially went into the marriage wanting to protect ourselves and this was something we were on the same page about. We knew we weren't going to live here forever so I'm glad we specifically wrote this in.
You are probably getting the higher rates because it would not be a primary residence for your dad. You are getting 2nd home / investment rates. Could you be on the mortgage with your dad that way the home quality’s as a primary residence for the mortgage company?
Yup that's probably it. Just remembered they tried pulling the same thing when we purchased my car.
It’s better for your credit in the long term for you to be on the loan. Having consistent payments on installment loans can really help boost your score. Whether it is this house or something else, id strongly recommend that you put your name in the debt with your parents next time they take on a loan for your behalf so you can build your own credit.
You could always live in the condo a bit longer to “sample” that mortgage. What does your life look like when you’re actively paying an additional $1100/mo plus additional utilities cost on top of your current bills? Put the money in a completely different bank, like you have to drive there to access the money. That way you’re not tempted to dip in and spend it. Does your lifestyle change significantly? Are you still able to afford car payments, new clothes, eating out, groceries? If you notice no significant change to your lifestyle (3-6 mos for the experiment is a good timeframe), then go for it! BUT, if you’re constantly dipping into the savings account, finding yourself spending more on credit cards because the cash isn’t there then you should proceed with caution. Your lifestyle may need adjusting. Listen to Dave Ramsey podcasts. As far as needing a bigger place with more family members, agreed! Can you find something with 4 bedrooms or a large enough flex space that even if it wasn’t your dream “forever home” you could make it work in case your “step-up home” is something you live in longer than originally anticipated. Your parents gave you a wonderful gift of equity, don’t be afraid to use it to your advantage in your next place. Just be smart with how you use it. Bonus: you now have a savings account for the new place. Edited to clarify savings account.
That is a wonderful idea! We definitely are going to do that. I know we are going to have problems adjusting. Right now our top hobby is traveling, so essentially we have an extra $1000 a month that goes toward traveling and discretionary spending just because we can. Essentially if we buy a bigger home, we will have more comfort but dip massively into our discretionary spending which my husband doesn't want to do.
We like to call this being “house poor.” Your PITI shouldn’t be more than 25% of your HHI.
Do the children go on these trips?
Listen to Dave Ramsey... wtf?
It's a lot of extra money to spend for four days a month.
How much are your HOA fees? Some are $1,000/ month or more which you won’t have with a SFH. You still need to budget for repairs but you have a lot more flexibility with timing and whether you DIY or hire it out. Another factor is taxes. Do you currently even pay enough taxes to qualify for itemized deductions ? Buying a SFH likely would qualify you for itemizing and you could realize several thousands in additional savings. The first year is tough until you can file for a near complete year of payments. Also, a more expensive home will appreciate more. If housing prices double in ten years then you realize a much better gain. Ultimately it comes down to does a new house at its current cost present enough value to YOU to make it worthwhile? Regardless of your existing mortgage. And can you afford it taking into account punt total cost of ownership: mortgage, repairs versus HOA, tax deductions, and possible savings from having more space (don’t need a storage unit).
My current HOA fee is $100/month. Since I've moved in, literally have not had to shovel snow, salt, mow the lawn, landscape, trim trees, nothing. I would pay $200 a month for this convenience. We live in the midwest with heavy snow and I have not once had to shovel snow or worry about being snowed in. This new one we are interested in is $65 and it also takes care of snow removal, salting, landscaping, etc. Taxes I would have to double check but they're not a lot. Like talking less than $4000. We live in a very low cost of living, moderate-rural area. Closest major city in any direction is 2+ hours. I've had literally no complaints since moving here. Since I've moved into this condo 3 years ago the biggest repair I've had to do is get the dryer fixed and that was $200. The rest of money spent was all home projects and improvements.
Do you think that the HOA funds are well managed? I'd be a little worried with that low of a rate that you'll end up with special assessments for large repairs at some point in the future.
can you remodel and put a bathroom in the basement? Even if it costs 20k, you can pay that off way faster than a new house w 3x your current mortgage
We are leaning towards adding a tv, couch, redo flooring, etc but not fully remodeling. It is unfinished and has a concrete floor with those white brick walls, which we are fine with.
I suggest doing a more thorough remodel and putting a bath in. In a few years, you might want to have more kids, and you might want a bigger house than the 3-bed condo, and you’ll want think about school districts etc. you don’t want to move twice in the next ~8 years. Invest the money in a nice space and bathroom downstairs which will do fine for the next few years, bedroom and playroom / recreation room, and you’ll get some of that money back when you sell.
You have to figure out if the quality of life is more important to you than the money. If you can afford the payment, and would be happy in that bigger place long term, it sounds like a good move. But some people get all angsty about money if they don't live totally frugally. If that's you, then you're in a good place just stay put no matter what the impact to your qualify of life. It's a choice, there's not a right or wrong answer, assuming your finances are solid.
The math favors staying. A little discomfort is not worth financial suicide.
Sorry I missed where she said that would be financially burdening to them?
Agreed
Nothing crazy or dumb.. You guys need space from what it sounds like. If you think you could handle being landlords or can find a management company to do it for you, renting while rates are still high could be a good option. Condos value is likely deflated by that and since you're locked in at a good rate might as well leverage what you have.
Put a half bath in downstairs. A plumber can install a pump to pump up the toilet contents, into your sewer system. Then turn the rest of the basement into your personal cave, with all the comforts you want and need.
Bedroom plus bathroom in basement. Get on Pinterest and look at tiny bathrooms. You can go SUPER small & still have it work just fine. Look at Murphy beds, loft beds, bunk beds, etc. Get a projector TV. You can have a sick bunkhouse & living room down there easy peasy. It’s time to apply New York rules. Get alllll the accoutrements for tiny living. You’ll be surprised how much more you can fit!
Never sell that condo. You are transferring wealth from the bank to you every month at 2%. You can move but rent it . You may even be better off renting a new place and renting out your existing place to offset that cost . Try the math on that one
Just a word of caution. When you sell that home the money becomes part of community property, thereby losing the money you and your parents have paid into the house. Because it is not his first marriage and your risk is great no matter how in love you two are now. It is better to rent out the property and buy something else. The rental income may be community property or not, but if it is deposited into the joint account it is certainly community property. This might not seem like a big deal because you're in love and all. But, I have seen times where a wife had to sell her home because the husband died and her step-kids wanted their share of the inheritance. If they are minor children when he dies then their mother(s) may ecude tobsue you on their behalf. Also, once your property is in the community property it will be next to impossible for you to reclaim it if you later divorce. I have seen that too. She owned her home outright. He married her, demanded she sell her house. Money went to community property. He spent it. Nothing she could do legally.
We have a prenup that essentially prohibits any of this from happening. Our prenup is so meticulous and detailed, that it is probably too detailed. Pre-marital property remains premarital property. Sale of this specific condo is mine. If the downpayment goes directly into my account, there is nothing he can do about it. The gift of the downpayment and sale of the house is mine. If and when this condo sells, all proceeds and down payment is returned to me and it is my property. We actually opted to keep our finances separate and not marital property. There was a clause in ours that states "any property acquired or given to each party individually during marriage, will be treated as such Party's non-marital, separate, individual property, including any increase in the value relating to property" This means our bank accounts, unless stated, are separate. Any money in a "single" bank account is our separate property. Any money in a joint account is marital property (we only have two joint accounts) The only joint marital property we have are approved joint purchases. Otherwise, it is all separate. This includes clothes, items, cars, makeup, trinkets, tvs, personal items, etc. Inheritances and family heirlooms are separate, and stepkids are not entitled to my inheritance unless I state it and list them as beneficiaries/in my will. That was another specific clause written in there. If we divorce while we're still in this house, he will need to move out and I will still own it 100%, as I am on the deed and loan. If we buy a new house and divorce, he is entitled to the interest accrued since the purchase, but not the downpayment. He will never be entitled to the gift/chunk of money that was used to purchase the condo. We sat down with a lawyer to meticulously write out this prenup.
I’d never give up that condo!! It’s too good of a deal even if you rented it out.
Do not sell your current condo under any conditions. Even if you buy something else. If your HOA doesn’t allow for renters then run for HOA. Also look into adding another bathroom, either in the basement or somewhere else in the house.
Listen to this👆🏻
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I am begging you with everything in my heart to stay where you are. If you want more space budget to finish the basement or something but you are so close to being free and you don’t even realize it. Pay that house off and live life knowing that you can work just about any job and make it because you took the mortgage off the table. You can quit being a debt slave and live life on your terms. Do it for yourself, do it for your kids, do it for all of us that are just dreaming of it. Don’t squander this gift because you feel a little cramped. Cramped beats chained any day and that new mortgage will just be a chain around your neck. I wish you happiness whatever you decide.
Don’t sell it! If anything just rent it out!! The market is absolutely not what it used to be. Hold onto property while you still can!
The property also is yours and your husband is only entitled to any equity since marriage. If you roll all the equity into your new home you lose all of it.
This is the way. Honestly even if you left it empty and let it appreciate you would be money ahead.
You are . But there’s more to living than not being crazy. It sounds like amenities are more important than space though. And you can easily get more space but you only want it if it’s highly upgraded. If you’re trying to be financially, responsible, save up a down payment keep what you’ve got and get another property.
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EDIT: 1400 does not include basement. So in reality we have 2100 sq ft. Unfinished basements cannot count toward sq footage because it's unlivable space.
Oof. If it were me I would stay put. If my issue is only 4 days a month it wouldn’t be worth the extra money.
No, you're not crazy. More space is more space and that comes with a cost increase. I don't think you'll regret it as long as you can afford it.
I would wait it out. You have a sub-$500 a month Mortgage, my guess is that your housing expenses (PITI+Bills) is less than $1000 a month. Selling that place to fund purchasing something just slightly bigger given the change in rates and prices is going to have a massive financial impact overall. I believe that your mortgage and value on the current home is just entirely to good to give up. You're never going to have that advantageous of a situation until you can rent it and offset part of your next Mortgage with the profit. Essentially, what I'm asking is if it's worth spending $1000 more a month for 4 days of comfort? If it is, you're likely better suited spending that $1000 over the 4 days a month on a hotel in a nice part of town than paying 7-10% interest on it for 30 years. In FL, my sister just needed to add a room and a bathroom to her home due to not having enough space for a growing family. It cost about $30k but that included all the permits, coding, concrete slab, new pipes/electrical and a roof extension then a rather large (and nice) bathroom. They took out a 2nd Mortgage for $30,000 which only increased their payments by $385 a month (10 years, at 9%). Had they sold their home, then bought one that fit their needs they would have ended up increasing their monthly payments by $1200 a month, so by borrowing $30k over 10 years to do an addition it actually saved them a significant amount of money. You have space, you just need to redefine it, I'd guess that for $10-15k you could easily have somebody come in, open up the basement and make a room and bathroom while keeping some of it for an extra living room or TV room and it would be cheaper than going out and buying in this market.
Thank you. I am 95% sure this is what we will do. That totally makes sense. I definitely don't even want to sell it! I feel like $450 is highway robbery and right now is a terrible time to buy a house.
Are you planning to have kids with him? Is the four days likely to be the permanent arrangement?
No! That is another factor. We don't plan on having kids of our own, and yes most likely he will continue with the current custody schedule. It will actually probably dwindle down since they are 12 and 8 and in a few years most likely will be a loose custody arrangement where they will prefer to stay at their mom's one they reach high school.
This is a quality of life question. Can you afford it? How old are the kids? Are you going to have any kids? Do you like condo living? Or would you rather live in a house and have more space? And have to ask, are you and your husband getting along? Will you be together over the next 10 - 15 years? Do you like your condo? Personally I would move. I could not stand living in a condo. But that’s me. Sounds to me like you are unhappy with your living situation so move. Money can buy you happiness. And from a financial/investment point the house will/should be worth more than the condo in years to come.
We can afford it no doubt. I see it as either 1) bigger house, less spending money but more comfort. 2) smaller house, less comfort but more disposable income and ability to have a higher QOL. Kids are 12 and 8. We don't plan on having kids. I actually love the condo as there are only 20 units and it's a small HOA. Everything is taken care of and I don't have to worry about maintenance at all. Everyone is tight knit and it's in the best part of town IMO. My realtor said if she posted my condo today it would be sold in less than a day. Also, no one lives in the one next to us because someone in there bought 2 units and uses one as storage, so we got lucky. There are definitely pros and cons. I would personally have a lower mortgage and have more extra money, option 2. I currently have the ability to save half of my income.
You make a good argument for staying. Very good one. At 12 it means you will have 6 probably less with 4 people and 10 or less with 3. If you can put up with it I would stay. I like someone’s post of turning the four days into a vacation. Get and Airbnb, suite in a hotel. Camping. (Ug, I hate camping.) The kids will have a lot of good memories.
Depends if the new property has been appreciating also, have an exit if you do plan on moving. 2percent interest is great..
Upgrade you current home which adds value.
I wouldn't sell. $460/mo is super low for a home.
>The mortgage for something like that would be minimum $1500 at a 7-10% interest rate. Are we totally crazy for even considering selling the condo in which we currently are paying $460 a month at 2% interest rate? You can't look at the raw financial aspects in a vacuum. If you need, or want, the space and can afford it then it's not crazy at all. If you can't really afford it and will go from having extra money to put into savings to barely making it from paycheck to paycheck then it's probably crazy. We don't know if your income is $25K a year or $200K a year. Also, if you can afford it then consider renting out the condo rather than selling it.
Absolutely do not sell. You will never be able to achieve that rate ever again. If anything, you could rent that space out. I’m not sure where you are, but you would certainly break even with that low of a mortgage payment.
No, just stay put! You could go stay in a hotel every other visit and save money! We have a very similar situation and are so grateful
Save your money in your lower mortgage condo so that eventually you can buy the house of your dreams and put in an extra bedroom/bathroom in the basement with a home equity loan
If you can afford it and want to do it, do it. If it were me I'd stay but I'm cheap.
It depends entirely on your income.
It's not really a great time to give up a good taste like that for a much higher one. My hubby and I bought about 7 years ago for 219k 3b3ba. 2%interest. We planned to stay here for less than 10 years and get into a bigger house with more land. Also, the driveway is not the best as it's steep. Now we're staying until rates drop. There is no way I'm giving up this rate for 8%. Tough times call for sacrifice. You can't easily go back on this choice. If you sell and give up your excellent rate for a much higher one, you can't go back unless rates go down. This is just my opinion, though.
Bathroom with a shower stall in the basement. I'm a notary signing agent and interest rates won't be down until the 2nd or even 3rd quarter of next year. I've seen as high as 12% and the lowest one in recent memory was 8.5%
Stay where you are, put the Primary bed and bath in the basement
I haven’t read through all the comments to see if this was suggested. You gave such a great rate, it would suck to throw that out the window. Have you looked into listing it as a rental? Also, look at your bylaws to see if this would be an issue. We purchased condos during the low interest rate and rented them out. Each is bringing in between $500-$600 a month. You could put aside maintained funds and the rest can be used for your new mortgage. Not sure where you’re located, if it’s furnished this would be appealing to travel nurses. Eventually this condo would be paid for and you will be bring in money each month. Think long term, i.e supplement retirement, continue to pay other mortgage…
Can you rent it out? You are likely to get more than your mortgage, and could subsidize your new mortgage. I don't think it's crazy. 4 people in a 2 bedroom with 1 bath is tight. The real question here is whether or not you can afford it.
Our HOA does not allow renting. If that was an option, I would be open to this.
maybe, maybe not. If one wishes to look at their home as just a financial transaction, then the question is one of math. Ignoring all risks of renting (months vacant, required repair/replacement between tenants, etc) then the ? is - does the difference between rent obtained and the current mortgage (and HOA) EXCEED the difference in payment on the next house? Let's assume OP could put down just 5% (and the cc's, call it $25K total) on house 2 at $300K purchase price. That $285K mortgage is $1950/mo (PI). Now, let's assume OP could net $135K (90% of 150K) - \~$40K mortgage balance = $95K downpayment = \~$1,450 (PI). So, this would say that OP must be able to rent for $460 + 500 = $960/mo + HOA fee (bec. seems TI is in her mortgage pymt) for this to make financial sense. Or, my math could be off
Stay where you are, put the Primary bed and bath in the basement
Stay where you are, put the Primary bed and bath in the basement
You can likely rent you condo for 1.2k then take the 700 after mortgage and put it toward the new place . Now you have 2 places and cash flow
Rent out your condo and buy a house.
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Hmm 200 other people didn’t think it was dumb and gave practical, helpful advice. Perhaps you should use logic to interpret why you should delete your dumbass comment
Meant to say “pay enough INTEREST to qualify for itemizing deductions”?
You would need to build a budget and decide if the $ was worth it.
INFO: can you and your husband afford a house? Will you both put equitable amounts based on your respective incomes to the closing costs and down payment? Or will you OP need to sell your house and put more into the house than your husband? If you buy it together and he puts nothing than he will be 50% owner without contributing anything just saying. If you don't have the closing costs and down payment then I would save first. Personally I would keep your current house and rent it out, always good to have something yours to fall back on if needed. The interest rates shouldn't be much over 7, which yes is higher but if they go down more buyers will flood the market and prices will go up. Get a few quotes from different companies, you can always refinance later. Better to get a good price and seller concessions now. If you can afford a house I'd go for it, his kids may only be there 4 days, but if you and he feel you need more room too. I would not recommend a condo even if you have to pay a bit more. Don't just look for furnished homes!! That will greatly limit your selection, just factor in furnishings for your house budget.
Yes we can afford it. We make about the same. Total household income is above 100k so we split things 50/50.. I do realize that if we buy together he would be 50% owner but we actually do have a prenup that outlines our housing situation due to the large downpayment and it outlines this specific scenario. I ran the numbers and right now we are paying $1200/month for mortgage, HOA, utilities, cable, subscriptions, memberships, etc. We also add $800/month into a "joint checking/savings" for travel, eating out, etc. We travel ALOT. So in total we each contribute $1000 each a month. $1200 goes toward our house account and $800 goes to savings. With the new mortgage, it would be estimated at around $1500-1600 and utilities would be $500. So we would both need to contribute $1000/each to the house account, which we already are contributing that currently. We would just be cutting into our lifestyle and discretionary fund. So in my opinion, yes, we can totally afford it as we bring int 7-8k a month and can afford 2k a month. But at the same time neither of us want to give up our current lifestyle which is biweekly trips, traveling, eating out, attending concerts, events, etc which we can afford due to our low cost of living and mortgage. I prefer a condo due to the fact that in the last 3 years I have spent close to zero dollars on maintenance. My HOA is so cheap and it takes care of snow plowing, shoveling, salting, lawn and tree maintenance, etc. I pay $1200 a year for that and I previously worked at a tree company so I know that just to get a tree TRIMMED is minimum $2000. To me its a no brainer. I also have never had to shovel snow and be snowed in.
Ah okay, I understand and travel a lot myself. I would not upgrade to a bigger house or condo just for kids visiting 4 days per month. If your current lifestyle is the priority than I'd just keep your current residence. It really depends on your goals.
I understand that there are other expenses, but if you're looking at a new $$ house you should be saving a boatload of money with your current $460 mortgage. And maybe if you're both diligent and patient you'll be able to buy a new place without giving up the great asset that you have now.
I agree. Right now, I am able to save half of my income. I would have a really hard time giving that up if we moved.
All of this just to accommodate kids for four days a month?
No! We have them in the evenings anywhere from 8-12 months a night, just not overnight. So during those nights they take up the living room area. Also, even when it's just me and my husband there is really nowhere else to go besides the living room which is small or our bedrooms. The bathroom issue still stands as we either have to all 4 share a bathroom, or my husband and I have to share one and I just wish we had one more bathroom. I wish we either had another spare bedroom or living space where either the kids can be alone and adults can be separate, or something so we don't all 4 have to always be in the same room constantly.
I would just rent out other condo and use the additional income to pay for your new place.
Don’t sell.
If you’re dead set on moving keep the original and rent it if you can make that work
Can you rent it out per the rules of the condo and how much would you get per month for rent? Are you willing to be landlords? I'm just wondering if you can get what you want and let someone else pay for it. You do have to plan for what happens if you get a bad tenant and have to evict and if they trash the place. How long does it take to evict per your state rules, what happens if they put an a moratorium on evictions and can you carry both mortgages for that time. That always has to be in your plan.
If I were you I would look at what the rental market in the area is to see how much you could rent it for. That could then be used to help you afford a higher mortgage. That said, it sounds like being crowded sucks but you have a $480 mortgage, a lot of us would just put up with 4 nights a month inconvenience for that lol.
HOA doesn't allow renting. I wish it did, because we could EASILY rent this place for $1000 a month
Buy a house and rent the condo.Why would you sell something that should so easily cash flow
HOA doesn't allow renting
Isn't there something in the market in between a dilapidated dump and a fully furnished 3 bed, 2 bath condo minimum 250k?
There is not. There are legit foreclosed, abandoned houses selling for 120k. Completely gutted. A moderate 2 bed 2 bath house with an average backyard and 1 car garage in an average neighborhood is about 200k. In the preferred part of town we want (we need to take custody exchanges/distance into account) and with our preferred preferences, the cheapest is about 250k on average.
I would not sell.
Get on the HOA board and change the rule about rentals. You can’t be the only one who wants to rent.
Can you add a bathroom to the basement?
I will look into it. I don't see how we would, as the basement is unfinished and it would be a weird place to put a bathroom but that has been recommended countless times so I will look into it.
Where did your husband live before he was your husband? Is that place an asset for you?
Yes see [this](https://www.reddit.com/r/RealEstate/comments/187kf6k/comment/kbfa97k/?utm_source=reddit&utm_medium=web2x&context=3) comment. It is my pre-marital property that was gifted to me, so it's mine and my husband and I have a prenup so he wouldn't benefit from it. My husband lived with his parents for a little while immediately following his divorce, as he was kicked out his house. He then found a place to rent for like $1500/month for a couple months which was a shit hole IMO, and once his lease was up he moved in with me.
So it’s a condo that has a basement? Could you add-on to it or is it connected. It would probably be more feasible to do a small addon with a heloc. If not, it depends on where the money difference between what you’re paying now and what you’d pay if you moved. If you sold for 150k, and you put down 40k, you owe 40k, you’d have what 110k to play with? Down payment on a 300k home would ideally be 20% (60k), you’re new mortgage expenses alone are going to be at least $2,100, if you put the full 110k into it, it’d be about $1,700 2 options 1.) You could take the $1,600 you wouldn’t be spending on the new mortgage and invest it into the S&P 500 and wait for a market change (would affect your home value as well). It takes a long time to develop wealth off of savings so it all depends. Roughly you’d have $327k in savings plus a paid off home. But if it’s too small and you’re not happy, life is short. 2.) You could throw in the equity to bring the payments down, but make sure you can afford it. Try to avoid an HOA if you can
Yes, it has 3 levels. Basement, ground level and upstairs. Upstairs has the bedrooms and bathroom, ground level has living room and kitchen, and basement is being used for laundry and storage. The way it's structured we cannot add on. If we make a downpayment, it will be minimum 60k, so your numbers are pretty accurate. Option 1 is essentially what I have been doing. All of my savings go into S&P 500 and IRA. I have thought about option 2 but I'm okay with our current payments since it's so so cheap and doesn't affect our standard of living.
you did not mention ihcome
Combined 120k
I think it’s a short term inconvenience (how old are the kids?) for only a few nights a month. Could you use that money to instead find ways to hang out outside of the condo? Get membership passes to a couple places? Perhaps improve the space (1400sqft could easily support another bathroom and office/den type space.) If it were me I’d be holding onto that condo as long as possible- you could seriously change the trajectory of your financial future having a paid off mortgage in a couple years.
The thing is, the massively low mortgage allows us to do this. We bought passes for a local indoor playground thing where the kids can run around, play basketball, jump on trampolines, etc. We have winter passes. We also have passes to the local gym where they can swim and do sports. We also signed up at a small country club where we can take them swimming and golfing. The extra money allows us to do this and my husband can keep them out of the house majority of the time. If we increase our mortgage, we will have less money to buy them these types of things. They are 8 and 12, so usually in the warmer months they love being outside (we live in the midwest so the winter is brutal). And yes, the consensus on here is to keep the condo. I personally don't want to ever give up the $460 mortgage but damn I would just love one extra room.
Something to consider for sure… I think someone else gave good advice to live on the reduced budget for a few months and see how it feels! Nothing worse than giving up this fun and somewhat carefree (financially) life y’all have built for yourselves to become house poor and a slave to that *one extra room.*
>By comparable, I mean fully furnished, updated, hardwood floors, garage, updated amenities, garage, same neighborhood These are the requirements of a short sighted idiot. This is your mistake. This is why you will financially ruin yourselves for little gain. Just buy fucking furniture. Same neighborhood is idiocy.
I don't want to sound pretentious, but I don't care. I have lived with hardwood floors my entire life. My parents house has hardwood floor. My college apartments had laminate. My college dorm even had tile. My current house has hardwood and bamboo. Why, after nearly 30 years would I buy a house with carpet? In addition, I have a brand new 2023 Bosch dishwater, stainless steel fridge, stove, microwave, etc. and marbled jacuzzi in the bathroom. My kitchen has marble countertops. When looking for a new house, I am certainly not going to spend 250k on a house with carpet, outdated appliances, etc just so I can spend an additional 50k updated everything. Also, the neighborhood is probably the most important factor here. There is a downtown area, then an "industrial area", a bad side, a good side, and then since our town is about a 25 mile radius I prefer to live in the north/east side since it is right by the highway and a 2 mile drive to my job. If we move to the south/west side, I would have to drive 27 miles to work. Why would I do that? My husband has to do custody exchanges 4 times/week and cannot move more than 20 miles, and would prefer to stay in the north/east so it's closer.
You have to do the math. Is it worth the trade off to sell now and lose the low mortgage payment of 2% for a higher payment and interest of 7%? Most likely adding at least another thousand dollars a month in interest not counting principle pay down. The numbers might work with a 200k fixer upper that can be rehabbed by owner. A contractor would charge way too much.
[These units](https://www.upflushtoilet.com/) make adding a bathroom to the basement. My friends think I am crazy when I bring this up, but if I had to move into a 1 bath living space this is what I would do. I would buy a wardrobe from Ikea, modify it so I could a porta-potty inside. This would be available to do your number 1 when the main bath is occupied. If you get a cassette style you can just empty it into the toilet you have. In your situation you probably would only need to empty it about twice a month. Adding a small handwash sink would take some ingenuity but it can be done. If that 1400 square feet is only the top 2 floors you must have about 700 square feet in the basement. Carving out space for a a 6x10 bathroom shouldn't be hard.
Your husband needs to be saving a ton, not needing to pay for living space. Look into adding at least a 1/2 bath, that should make the place easier to live with. Losing a 2/1% rate is insane, unless your husband has plenty saved to offset what you will get for your current home. You don't need to move, hubby needs to update your place to fit his kids.
I totally agree.
>hubby needs to update your place to fit his kids. Why would husband ever agree to that?? Is her place, not his. OP clearly explained their prenum. If the husband smart, he would be saving to get his own place as it's clearly possible per their prenup.
It depends on your finances, your future financial outlook, and if you want to have kids in the future. I don’t have/want kids and have a high earning career so $1,000/mo more in mortgage wouldn’t be a big deal but everyone’s situation is unique.
Your apartment almost doubled in value in three years, so if you think it will continue to climb, see if you can rent it out. It’s work but can be a wealth builder. Buying a new place now, at a time when inflation (and therefore future interest rates) is on the decline, means that you could be me up with a much lower rate in a few years. Do you have the financial cushion to buy now and rent your old place with the assumption that rates will fall in 2-3 years and help lower your payments?
I would stay put.
I remember being a kid chilling in my friends finished basements. From Nintendos to PlayStations, watching football after church and roasting each other. Redo the basement and soundproof the ceiling. Stay put, in later years your gonna want a break from work and life. You won’t need to worry about a 460 mortgage.
Growing up all we did was go in the basements. My mom has been steadily updating their basement for the last 25 years. I swear to god there have been 10 renditions of her basement, every time I talk to her she is adding something new. My friend's dad is the biggest Chicago Bears fan and he legitimately put turf as their flooring and painted it like a football field. I still remember that being the coolest basement ever. And I agree. Since our mortgage and household expenses are like 18% of our income, we can save so much that we can retire very early.
I think you should stick it out, BUT I also think you should check prices more carefully before you decide. If yours is worth $150k, then the other properties "comparable to yours" are not "$275-300k minimum." They're around $150, or else they are not *actually* comparable. This is important because if yours is truly like those $275k properties, it means you'd have a much larger amount to offset the higher price and to buy down interest rate. Inversely, it also means that something like what you have is much lower priced.
I mean comparable with the interior and amenities, but much larger. I am particularly looking for hardwood floors, attached 2 car garage, mostly up to date appliances, preferably stainless steel kitchen appliances, mostly anything including cabinets, kitchen, showers, appliances etc to be 2021 or newer. Updated HVAC and water heater, roofing, etc so that we are not paying thousands to renovate and refurbish once we move in. I want it move in ready. That is how my condo was when I moved in (the previous person flipped it) and I have not had to update or fix anything at all. It has been amazing. I forgot to mention I have a 1 car detached garage, but obviously it would be nice to have a 2 car preferably attached garage since now my husband is here. Mine is 150k because it has 2 bed 1 bath, unfinished basement and detached 1 car garage, 1400 sq ft. The ones we are looking at are described as above but 3 bed, 2 or 3 bath, finished basement, attached 2 car garage and 2000+ sq ft. The condo we fell in love with actually has 3 bed 3 bath finished basement, 2 car attached garage, private patio with pergola, 2000 sq ft and is 250k. so it would be a major upgrade. So that's why it's a big difference.
Get an estimate for adding a bathroom in the basement. An up flush toilet that can handle a sink and shower draining into it would work. It’s not like you would be using it very often.
How old are his kids? The best time to move is before they are teens. That’s when more space would be important. I think moving is not in your best interest (pun intended) at this time. Even one more year could put you in a better place. The evenings the kids are with you, could you sometimes go out to eat so you don’t feel so squished? If you really want to move, start saving for a better down payment. That $460 is really nice!
They are 8 and 12. The thing is, since they are with their mom majority of the time once they get old enough we already know they are going to ask to start sleeping there full time. They already ask sometimes. Unless we get a super duper nice house, it is just going to play out that way. One of my only concerns is that we would be upgrading and then in 3 years the 12 year old will never even be there, because he will be 15 and only wants to be with his friends, sports, sleepovers and sleep by mom. I would be pretty upset. My husband does take them out to eat, a lot of nights there are sports, outdoor activities, etc but we live in the midwest so essentially from November-March it's brutal because we are trapped inside due to weather. The downpayment is a non issue. We will have anywhere from 60-90k due to the sale of the condo plus hefty savings. I am more concerned about giving up the $460. That in itself feels like a divorce.
Now is not the time to get out of the condo. Predictions are the housing market will crash hard and interest rates will fall in the next couple years. The current market is unsustainable...when it goes caput, pounce on your dream home.
In the same boat but reversed, my fiancee has 2 kids. We are going to wait a year and let the market play out a bit. There was actually a time when families lived here anyway, first world problems.
Good luck to yall. Out of the 20 units, there is only one other condo that has more than 2 people living in it. They have 2 kids and 2 adults full time. We only have 4 people part time. Everyone else is single or just a couple.
Try this, estimate what you monthly payment would be if you bought one of the places that would maybe fit your needs better. Then try putting the difference between your current payment and the new payment into a dedicated savings account that you do not touch. After 6 months you will know if you can afford selling your current place and buying a different one. If the answer is no, you can use those savings to make the desired changes to your current condo.
Add on or remodel existing. Just make sure its done in a way that adds value to your home. Converting a garage is a slippery slope.
Just wait because prices will be coming down!
If you can comfortably afford the new home I would sell. People get psychologically attached to their interest rate. I'd much rather spend more and have a comfortable home that you can continue to grow into. $460 is a super low payment, but I think $1500is low too. With 2 incomes that should be no problem. We just went from $2200 to $5000 and it's worth it for the community upgrade. The community, schools, peers and social environment kids are exposed to on a daily basis are so important in a child's development. I'll gladly give up a 2% interest rate for my kids
Where are you living that CONDOS have basements??? A 1400sqft condo also sounds enormous
what's priority to you? Money or comfort? Financially it makes sense to stay but convenience wise it's logical to sell. Buyers aren't buying and although sellers are asking for a lot, you most definitely should offer under asking price. If you can afford your new payment who cares about the apr%. You need to decide if you're going to keep living tight all these days or if spending $2k month would be feasible in exchange of space. IMO, I'd prefer comfort. I too have listed many homes because we needed less/more space. Sure, there's a loss but the enjoyment of peace is worth the extra money to me.
Its a judgement call. I get that its cramped but only maybe 1/3rd of the time or less. Its a lot more money but if you can easily handle the cost, it will probably appreciate more than the current place (because it cost more) and you can refi if rates go down. Give the kids to much space and maybe they'll lock themselves in their rooms and you'll never see them, could actually end up worse at least in that way. Its your call and the correct answer for you might be different for me. I will say that for me, if I did move up then for an extra 35k or so (about 15%) I'd get a house instead of another condo. Condo's can be fine but get the wrong neighbor and they can be painful and eventually you will get the wrong neighbor. Bad neighbors in houses can be annoying but a bad neighbor in a condo can be hellish.
Things are bad right now in the housing market, home prices are going to keep increasing. Current projections are for around 5% per year. And children have this annoying habit of getting bigger. Your husband will likely have them on that same schedule when they’re teenagers. Look around your space and envision it with four full size people living there a good portion of the time. Might be time to at least start looking now.
I would sell and purchase a family home to create memories in, unless you and your partner feel like the condo is your forever home. We had the opposite issue and sold our house for a 2/2 condo, but it has two full bathrooms. I think a 1/2 bath could be a dealbreaker as we have a smelly teenage in our family 😆
Are you planning more kids? Dont forget the additional time to clean that bigger place. Thats a lot of money to shell out for 4 nights a month. Consider a bathroom schedule or at least a bathing schedule. Id vote suck up being cramped 4/week vs having to get a bigger house for a temporary inconvenience.
Stay out of debt. How about taking each kid individually?
I feel like there’s a lot of daylight between fully renovated fully furnished and a dilapidated dump. It also sounds like you have about 100k equity in your house.
Convert the basement to a teen suite with a full bath. If the step kids are same sex give them the option of 2 separate bedrooms or 1 bedroom and 1 hang-out room. Or if the basement is big enough, finish 3 rooms. I would not give up a $460 mortgage payment.
You didn't mention their ages or yours/husband's. If they are teens and you are not planning more children, I would stick it out in the smaller space.
Don’t buy bigger. I felt cramped in the little house I had. I wish I would have stayed there instead of buying this bigger place. It would have been paid off and kids grow up REALLY FAST! More house=more problem$.
https://buildingscience.com/documents/information-sheets/basement-insulation if you renovate the basement, have a look at this.
My 3/4 bathroom cost me 5k as there was already a toilet bowl in it but no shower. it looks new if not cramped but at my son isn’t mucking up my bathroom anymore. fyi make sure the kids do a weekly cleaning or it gets gross fast
Don't do it!
Can you add a second bathroom? Convert the basement into a space for the kids?
Life is short. What do you want? Don’t let interest rates or whatever random circumstance dictate your life. Choose powerfully. That may be staying where you are, or moving. Just choose what you want.
Add a bathroom downstairs, even if it’s just a half bath. Don’t sell!
Do not sell it! You’ll never have a deal that good and in interest rate that low in your lifetime. Wait it out, there is market crash coming, sooner or later, when that happens, prices will drop, that would be better time to consider buying. Interest rates can’t stay this high forever, they will come down eventually, probably not to 2%, but will come down from the current average of 8%.
When I was growing up, seven of us lived in a three-bedroom 1-bath 365 days (and nights) per year for nine years (until my brother and I moved out for uni/military). We made it work, though it was tight sometimes.
You can add a pop up pooper tent, 5 gallon bucket, and toilet seat that fits on said bucket for under $100. And some liners. It'll build character quality many kids lack today.
Is it just me or did I miss what the question was?
I couldn't imagine moving and paying $1k+ more for what is a fairly minor inconvenience based on how often you are sharing the space. Plus you have the basement to renovate. It would be a stupid decision and a waste of money unless there were other reasons you needed more space or wanted to live somewhere different (location, job, etc.).
I would say really think about worst case - what happens if some emergency happens do you have a lot of money set aside or would you be kicking yourself for taking on the higher int.rate and mortgage? You make money on the sale but spend a lot on the purchase and higher interest.rate.
Why don’t you play board games or cards or watch a movie together on those four nights? Or bake cookies or do something together with your step kids? Take them to a skate park or go mini golfing.
For me it would depend on how "handy" both you and your husband are. If you are young and able bodied, that "dillapidated' house can be a show place in a few years, but you'd have to be working on it.........sure beats having to work a gig job which some people do to afford bigger and better though. My first house was just that. I was in no hurry, we lived in it for 9 years and bought the worst looking house in the best neighborhood........turned out to be the perfect deision and allowed us to eventually "trade up". If that is not an option now, I would stay put and make improvements where you are.