Skip to main content

Purchased “dream home” but it’s not working out.

Cross posting with r/personalfinance to get different opinions.

I’ll try to be brief here while providing detail, but my main question is around how you would handle offloading a home and renovating the new one.

Last year a house in our city came available that we thought would be our dream home, and not necessarily being I love with our old house we jumped on it. We have been lucky in investing in our primary residence over the years, buying and selling at the right moment a couple times. This meant we have a lot of equity in this “dream house”. However for a multitude of reasons we no longer want to live here and want to go back to a more modest home.

About the house - purchased for $810k in august of 2022. Took a 30 year fixed loan @ 5% on $215k, paying ~$1800 a month all in. Equity in theory is around $600k. The market is still fairly strong. Could likely sell for around what we paid for it, maybe a little more, but with realtor fees likely we would take a loss, which we are ok with if it is reasonable. Win some lose some.

Ok time for the question. How would you go about downsizing to a more modest home. Keep in mind the more modest homes likely would require some renovations, which ideally we would not live through while living in the home, but open to the possibility.

Option 1 - put current house on the market. Once sold either try to buy something else right away or rent till the right home comes available and renovations are complete. This is the safest option obviously but I would like to avoid making the family move 2 more times.

Option 2 - get approved for a second mortgage. Once the right modest home is available, purchase with second mortgage and move in. Put current home on the market and hope it sells quickly. If it doesn’t, we would be carrying about $4k-$5k worth of mortgages till it does. This would allow us only to move once but if we needed to renovate we would be living through it.

Option 3 - same as option 2 except we don’t put the current home on the market right away, take a HELOC out and use that cash to finance the renovations on the modest home. Once the project is complete, sell the current home and pay off the outstanding debts. This would be the least obtrusive to the family but that’s a lot of loans and though our income is high, that would stress me out.

Option 4 - something I am not thinking of.

So, how would you suggest going about this?

submitted by /u/kirkjufell787
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/13uw9gp/purchased_dream_home_but_its_not_working_out/
Labels:

Comments

Post a Comment

Popular posts from this blog

Aren't comps/CMAs useless with buyer credits at close happening now?

I'm looking into buying a new construction townhouse in my HCOL US city. I'm seeing builders offering interest rate buydowns worth $20k-$60k on $800k homes (rather than just lowering prices) in order to keep their comps high for their other units, now that buyer demand has been declining. I asked my agent about these, and he said these buydowns aren't even the full story: buyers can write all kinds of other credits into an offer, like their closing costs, prepaid sewer fees, etc. Apparently cash buyers can just write in a "buyer credit at close" for any amount in their offer. So a new townhouse that appeared to sell for $800k in the MLS might have actually been a cash offer with a $100k+ buyer credit at close, meaning the buyer only spent $700k or less in total, but to the rest of the world they can only see the $800k! So that made me realize I can't trust comps/CMAs for other new construction townhouses. The sales prices could be way lower than they appear...
1 comment
Read more

How to Avoid Property Scams in Delhi?

Here’s What You Should Know! Commercial Real Estate (Non-Residential) Buying a property in Delhi can be tricky, especially with all the stories about scams and shady deals. If you're in the market, here are some tips to keep yourself safe:Double-check the documents: Always verify ownership and approvals. Don’t just take someone’s word for it—look at the actual papers. Do your homework on prices: Compare similar properties to avoid overpaying. A little research can save you from a bad deal. Work with trustworthy people: Whether it's a seller or an agent, go for someone who's transparent about pricing and the process. If they’re dodging questions, that’s a red flag. Ask for reviews or references: If someone you’re dealing with has a good track record, they won’t hesitate to share testimonials or connect you with previous clients. I’ve noticed that some property services have started focusing on things like verified listings and clear communication, which makes the whole proc...
Post a Comment
Read more