We have a one family house which we own and used to live in. We currently own and live in a two family house since 1997. So we collect rent from the house we live in ($1,100)and from our other house($1,450). We are thinking of selling our other house to payoff our mortgage on our current residence. We owe about $150,000 on a $175,000 mortgage with an 30-year fixed loan at 7.75%. So we are paying about 2k a month for the mortgage. Our other house is probably worth between $300k-$400k. We have owned this house since about 1990. So if we sell it we would be able to payoff our mortgage and then have the rest for ourselves after taxes etc...Or we have thought about refinancing, but maybe it would be better to payoff the mortgage?
2006-10-30 07:06:42 · 7 answers · asked by okterrific23 3 in Business & Finance ➔ Renting & Real Estate
I feel you should keep the house and refinance. Real estate is pretty much the last remaining "solid investment" there is today. I work in the mortgage industry and could be better off talking to you with some different options as well as the pros and cons of both stes you are considering. Feel free to call me at 1-800-766-5185 Ext 4439. My name is Tim DiBell
2006-10-30 07:11:04 · answer #1 · answered by ttothej4343 1 · 0⤊ 0⤋
Tough one. It sounds like you are making a good income from your 2nd house, but you are paying it out again to your mortgage.
If you continue paying your mortgage, you will eventually pay around $275,000 in interest alone. Will you be able to make more than that amount off your second house if you hold onto it? Just on the face of it, it seems the two options are about equal financially, unless there is a real estate boom in the area of your 2nd house later on. I'd rather know I have no debt and pay off the mortgage and reinvesting the money.
2006-10-30 15:31:02 · answer #2 · answered by Phoenix, Wise Guru 7 · 0⤊ 0⤋
First, go refinance that 7.75% mortgage now unless you are going to sell soon. Having an extra $300 per month may make you feel better about hanging on to the second house a while longer.
2006-10-30 15:34:42 · answer #3 · answered by larry r 3 · 0⤊ 0⤋
Ever consider taking out a portion of that equity and purchasing another investment property? If you are able to make that much money in the area you own the properties why not consider that option? You did not say whether or not you are making a profit on the rents you are collecting. If you are making any kind of profit then that should be something to consider.
2006-11-05 23:12:49 · answer #4 · answered by frogee100179 3 · 0⤊ 0⤋
well you should have asked that question earlier on, the american housing market is slipping right now, just read the papers. So well I advise you to either turn back time, sell the house before it is too late, or wait and hope that in the futur the housing marked will become a rosier place than it is at the moment.
2006-10-30 15:17:01 · answer #5 · answered by Solveig 2 · 0⤊ 1⤋
Hold on to it until the market changes again. Also be aware of the Capitalization Tax and the exemptions.
2006-10-30 15:23:18 · answer #6 · answered by Anonymous · 0⤊ 0⤋
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2006-11-01 03:27:36 · answer #7 · answered by Anonymous · 0⤊ 0⤋