Buy a home or refinance condo?

[BASIA]

We have a little problem and need advise. We purchased our condo in 5/2006. It was a 2 year fixed mortgage 80/20 and now it is increasing. We cant seem to refinance without paying 7-8k for fees or just to lower the principle because we got 100% mortgage when we got it. So in order to refinance we need to come up with 7-10k. Pay closing costs again (we didnt even break even from closing cost on the purchase) and to break even we would have to live there 5-8 more years. The town is not the best town but no the worst. The school district sucks, and the taxes are very high (our condo tax just went up $700!!!!) We cant seem to refinance cause the loan to value is too low. (TALKED TO ABOUT 15 Different mortgage people already)
Now we have been looking into buying a house in a couple of cities that have lower taxes (insurance) and better school district. It would be about the same a month (maybe $100-150 more a month than what we are paying now) to own a small house 1100sqf (condo is 850). What is in our price range are small houses mostly with no garages (we have 1car garage now but no basement) with or without fireplace, 3bed (2now) so yes it is an upgrade and a place where IF we cant afford to move in few years to a bigger place we can raise our feauture children in. (condo we would have to move when we have 2 kids) And well we would have a small yard. My mom is saying we need to sell our place and move to a bigger house with fireplace garage and bigger lot. Now we dont care for gardens and yard work. We want to just have a small pice of land. One house we are looking into is forclosure and we may possibly get a good deal on it. But if we sell the condo we are not making money (maybe even loosing since we updated a lot) At this time selling seems the best. But I am just confused if we are making the right ddecision. WE dont know what to do. Sell and cut our losses and buy something that we will have equity in or pay the Lots of costs and refinance and be stuck there for next 7-10 years.


HELP!!!!!!!!

[carolinalady67]

With the housing market the way it is breaking even isn't so bad a deal. Refinancing sounds expensive. But if you can do it, or if the payments are something you can afford at the new rate, even being stuck there for seven years probably wouldn't effect your children with school. Even if in a couple years you have a baby, you could move before or right around the time that baby would be starting school.

But then think about if you want to start your family in that condo? If not, do you want to wait seven years to have the first baby? Don't think about just the fianacial part of it, think about your life and what you want and when you want it. I'd sit down and make a list of pros and cons for each option. And then follow your gut.

[BASIA]

Thanks Lisa

Well I do want a house now. The thing holding us back is the financial aspect. I mean if I am going to be paying the same for a house that I am for a condo (give or take $100-200) than I would rather do that. But well we may be loosing money or just bearly breaking even doing that. So I am very confused!

[carolinalady67]

How soon do you need to decide?

[Christa]

How is the market? Will you be able to sell your condo?

[BASIA]

We need to decide in next couple of weeks. We have been trying to refinance since April. The market is ok so we should not have many problems with selling

[BASIA]

ok so here are some pros and cons on both. I got this from my journal


our pros for buying a house (what ever house it is):
-land
-better schools for the future
-hopefully 3 beds
-no neighbors behind the wall
-privacy
-lower taxes on cars/home (compare the mill rates etc)
-lower insurance
-no condo fee
-same monthly mortgage payments as the condo (give or take $100)
-30 year fixed mortgage
-instant equity in the home if we buy good
-ability to do what ever we want as in replace windows/doors when we want and what we want it with
Cons of buying the home:
-yard work lol
-snow removal
-renovations
-may need some new furniture (would love new furniture but $$$)
-may be further to get to work for one of us
-need to worry eventually about outside stuff like roof/siding
-possible oil heat which could be EXPENSIVE (but possibility of changing it to gas withing a year or so so that is not a big concern for me at all)
that is all I can think of

Pros of staying in the condo:
-already fully furnished (but will need new couches soon)
-already renovated other than the laundry room
-no yard work
-no worries about roof/siding

Cons:
-neighbors on the other side of the wall (lets say no TV on high or OHHH AHHH!! Lol)
-condo fee every month=overpaid insurance and some yard work done for $1200 a year
-still have to spend additional $300+ for condo insurance to insure it inside
-need to beg to replace anything on the outside like our sliding doors that are older than me and let in a LOT of cold in the winter which causes us to loose a lot of money on the heating!!! Deck is old and can do anything without their approval
-waken up in the morning in the winter to go and move a car so that they can shovel the snow
-no land to have a picnic, etc
-not the best town
-high insurance and taxes (on both cars and condo)
-no way to expand in the future
-NO EQUITY since we are at 99% loan to value
- to refinance need to borrow more than the place is appraised for (money out of packet) and what we bough it for!!!!
-Electric heat (expensive!!!)
-Small
-only 2 beds

that is all I can think of for now

[carolinalady67]

It looks to me like you have a lot more pros to buying the house :)

[Winter_Bride]

:word: It looks like you've somewhat made up your mind... Something else to consider though is if you're looking at moving a few cities away, can you find jobs there, and will you make as much as you do now?

[BASIA]

I think we are almost sure we are putting out the condo on a market. After all I am cleaning like crazy today.

And we are looking at town withing 15-20 miles from where we live so jobs are not an issue as we work in different cities that we live in anyways. Everything is driving distance so we are fine on that end.

[BASIA]

WELL the house seems to be OUT!!! WTF!!! We just found out that someone listed their condo in our complex for 125k. We need to sell ours for 136+ to break even. So they are just dropping the value of our place by 10k and if the accept lower offer than that may be even 20k!!!! WTF!!!! We will be lack if we can refincance even at VERY high rate!!! UGHHHH I AM SOO ANGRY I JUST WANT TO CRY!!!!

[carolinalady67]

Basia, I'm so sorry. Is their's the exact same as yours? Same number of bedrooms, square footage .... ? How can they aford to list it for so much less?

[Winter_Bride]

That's insane!! I'm so sorry! I'm with Lisa though - it's odd they can afford to sell it for so much less! :hug:

[BASIA]

They got it over 4 years ago for only 90k so I guess they are making money! And it is pretty much the same thing as ours. We will talk more tomorrow and see what we decide. I am too pissed off right now to talk to DH about it. He keeps on asking what I want to do now and i dont know. I know I want a house but we cant afford to loose money!

[walleye3]

One other thing to also calculate in your break even costs is the cost that you will have to pay to list your condo and commissions, unless you plan on selling it yourself. Commissions can be 5-7 percent of the selling price when you look at both a buyers agent and selling agent getting their commission. That is the only thing I can think of and I am just curious if you have figured that into your break even selling price.

[BASIA]

Yes I have. That is with the commissions. We may try to sell it our self and see if we can save 7-8k

[*Ashley*]

I'd try and sell it yourself. Also I think it would really benefit you to look into having a professional stager come to your condo to give you some tips on how to arrange your furniture and any minor updates you can make (think less than $500 for all of them) that will really help you get more bang for your buck. I know it sounds silly, but my mom does it and the houses she stages usually sell within the next week -- and these are homes that have SAT on the market.

Kitchens and bathrooms sell houses and condos, so remember that. Organize your closets to show how large they are, how much they hold. There are lots of minor things you can do that will make people look at your place and think -- "wow, this is worth the higher price"

Good luck!

[BASIA]

Thanks for the info!! We are refinancing now and than we will put it on the market.