Should I Sell My Home? Financial Situation?

Question

Well I bought a townhouse about 8 months ago (OCT 06) for around 215,000 in Beaverton Or (Gate Neighborhood) -

(2 Bedroom & 2 Bathroom) around 1290 SQ with two car garage and a small backyard that is fenced.

I got kind of bad loan terms but thought buying a house would be a better investment than a small rent payment. Loan was a 3 -1 arm loan and was for 40 years. I believe interest rate on my first mortgage is 6.7% and 2nd loan is 9.3% on 43,000 dollars. I HAVE A PREPAIDMENT penalty.

Payments come out to be around $1650 a month plus HOA and utitlites.


I am looking down the road and I don't see the house appreciating all the much with current conditions. I am not wanting to wait till the end of the time "where my prepayment" pentaly goes way since I would have put another $25000 into the house in mortgage.

If I wait another 2 years to sell I would have put $40,000 into mortgage where most will probably be interest.

Should I sell now? Any SUggestions?

(Rent for an apartment would be around $550)/month

I have two jobs - One is 8-5 and the other on the internet. RIGHT now both are unstable.

I can't afford the house if I don't have both.

I did not purchase this home to live in it for 30 years. I wanted to live in it for 3-5 years. But now with current conditions it looks like the house will barerly appreciate.

Prepayment I will have to look into.

Answer 1

This is a hard question.

But first, think of this, When you retire, you want to OWN a domocile FREE & CLEAR, so your pension can be used for living with no payments or rents that keep increasing.

Now onto your problem...How much is rent cost?. How much is selling cost and legal fees and mortgage payoff fees on townhouse? Is it possible to save extra money for more prepayments in the future.? What are prepayment penalties??
Are they 3 month interest, or interest differential to end of term.?? It matters, I paid my first house off in 4 years by prepaying mortgages at evey oportunity, and 3 1/2 years for the next house...Houses were cheaper then, but so were wages, but I saved $100s of thousands by not paying interest over 25 years. Think of all these things to make your decision, and you will have to decide which is best for you.