Should we sell our house?

Odetta Fujimura: Should we sell our house?
I always wanted to be a homeowner , But now I wonder what I have gotten myself into! My husband and myself own a home in california that is valued at about $ 450,000 thousand dollars and we owe $ 380,000. Our monthly income is about $ 3500 dollars and our mortgage is $ 2500 not including taxes. We are cash strapped alot needless to say only a tiny bit of $ is going toward principal each month (If at all b/c we have a pick a payment loan) I am always thinking how much we could save every month if we sold our house and rented one in town. Not only would we not have these huge property taxes but we could save at least a $ 1000 a month. Then according to my thinking if in 5 years we wanted to purchase another home we could and would have a bigger down payment and if not we could continue renting and save for our future and have alittle wiggle room in our budget. My tax man says don’t sell because you’ll never be able to afford a house in this area again (not that we are affording it now!)

Answers and Views:

Answer by Canadian Bacon
“My tax man says don’t sell because you’ll never be able to afford a house in this area again”

So live in a different area. No big deal.

You’ll end up paying ridiculous interest if you can’t make decent monthly payments. If there is no hope for an increase in household income relatively soon, then I support the decision to sell and move.

Answer by Kurtis
If the mortgage takes up most of your income, then sell the house. Either that or try to get your rates down or refinance. Better yet, invest in a condo. You wouldn’t have to deal with the hassles of maintaining a house.

Answer by yahoooo!
i would say, don’t sell this house…because nobody will buy it anyway..or if theres a chance somebody will buy it, it would be for a very long time after you put it in the market. it is not really the time for millions of people to shop for houses and it will be like that for a while…sad but it is look like….so, if i own this house, i only have less than 1000.00 a month for my living expenses, i will just try find a way to increase my income by working 2 jobs, not getting pregnant and have a baybee, not dreaming of a new iphone, not craving for caviar and wine every dining night, not become fan of people in movie making, maybe not even buying a new novel to read while cooking….well, i guess you know what i mean…if you will foreclose the house, your credit will be damaged resulting to not being able to do any loan anyway, so just leave simple for a while…it will get better….

Answer by endo
Your housing expense with taxes and insurance is probably over 80% of your income. Sell your house. You sound like you have a good plan and will be much better off as long as you don’t spend the equity you have in your home when it becomes liquid. It will probably be a huge relief not to have such an insanely high percentage of your income go to the house payment. Like you said, only a small portion each month is paying of the balance so it’s not like your are building equity.

Any mishap could keep you from being able to make your payments. There is also no guarantee your home value will increase. If you save all that money and your income happens to increase you’ll be much better off buying a house there later. If you can’t you’ll still probably be happier somewhere else.

Id get a new tax guy, that was horrible advice.

Answer by Lisha Barta
The first rule of holes is that when you find yourself in one, stop digging.

The second law of economics states that “Sunk cost is irrelevant.”

That being said, you need to get out of this house situation as fast as possible and get your financial house in order.

From your description, you have absolutely no business being in this house. Your PITI (Principal, Interest, Taxes, and Insurance) should NEVER be more that half your take-home pay. You have other bills and unexpected things happen.

GET OUT AS FAST AS YOU CAN FOR WHATEVER YOU CAN GET OUT OF THE HOUSE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

A small short term financial bath now can save you from a tsunami later.

Good Luck

Answer by Sharona
I know it is very tempting for me to say “it depends” and lay out all scenarios possible, but in your situation I would rather telling you my instinct.

Sell it, and sell it quickly because the market is coming down in many places already. You might have to reduce the price, but if you are not will to, you would have to wait for at least a couple of more years before the market recovers. But then you would have paid much more interest and taxes and …. into the house, which, frankly you are not able to afford.

Period, you really should not have drawn such a big loan. It is out of proportion compared to your income.

Home ownership is supposed to be something that one takes pride in, AND feels happy about. If your finance is so tight, where is your happiness? Are you working for yourself or for the house?

I always tell my friends and relatives, do not become the slave of your house. Everyone needs to have a COMPLETE life. You should have money set aside for emergency, for traveling, for your car, for your children if any, for movies and music, for eating-out, for jewery, for nice shoes and dresses, for electronics, for generosity, for partying, …………………..

Get your happiness back.

My morgage plus tax plus insurance plus utility is well under half of our household after-tax income, allowing us to have fun!!!