Owning a house?

[Anonymous]

I currently own a condo which I got it at 139k the value has gone up 221k maybe even more since there has been a lot of renovations like new granite countertops and new flooring. Would it be a good idea to sell my condo and buy a house since the value has gone up a lot? The whole equity confuses me a bit.. only answer if you're serious. I don't need any rude comments

[lightbulb27]

there's a financial answer and an emotional one it sounds like.

financial.. you'll pay tax on the gain unless you take one time exclusion in the USA... call that tax on $100,000 gain = $30,000 in tax.

You'll pay a realtor to sell it... assume 6% of sale price, plus closing costs. $13,000 roughly.

So you are down $43,000 to make the switch.

that's not talking about your loan either... you may end up swapping a low rate for a higher one... more expensive.

...

I like the privacy and independence of a house. but they are expensive to maintain. condos are less work... someone else takes care of outside, but can be noisy due to neighbors and there are risks to being in an association... if it's not run well.

...

I'd think about what I'm really trying to achieve.

[AviatorTom]

Problem is all those house values have also gone up, most likely at a similar percentage rate as your condo, and condos are historically cheaper than houses. That means the cost of a house would be more than the value of your condo. Unless you can find a house at a reasonable price, you're better off holding onto the condo.

You'd also have to take into account mortgage rates, which have increased in the past few years. I'm guessing a house mortgage would be at a higher rate than the condo's mortgage.

[AI Opinion]

Your condo's value has increased significantly, so selling now could yield a good profit. Consider if owning a house aligns with your lifestyle and financial goals, including future maintenance and property tax costs. Determine if your current financial situation supports taking on a larger mortgage if needed. Understanding equity's role in these considerations is crucial. Consult a real estate expert for localized insights, and evaluate market trends to ensure a wise decision.

[ArrowheadSW]

When you say that it has gone up 221K, do you mean that it has gone up TO 221K, or an additional 221K to 360K? How much would a house cost in your area, that would be the size that you'd want? That is where I'd start in making a decision.

[seeyounexttuesday]

#1. Do not listen to that AI dipshit. What is your current interest rate?

[Asker]

I got it at the lowest which is 3%

[seeyounexttuesday]

So you're looking at almost tripling your interest rate if you move. I wouldn't go anywhere unless you HAD to.

[Asker]

True no I don't have to, it's just the condo been giving me problems

[seeyounexttuesday]

A brand new house can give you problems, too.

For a $300k house, comparing a 3% interest rate to a 9% interest rate:

Monthly payment $1,474.74 (3%) -> $2,814.28

Total Interest Paid Difference:
9% rate: $663,140.80.
3% rate: $180,906.40.

Total Cost of Loan Difference:
9% rate: $1,013,140.80.
3% rate: $530,906.40.

[exitseven]

Okay, condos usually appreciate in value but not as much as a single family home.

[Iron_Man]

I own my own house bought and paid for

[Asker]

so so luckyy best feeling ever isn't it

[Iron_Man]

It’s a wonderful feeling

[Iron_Man]

but I didn’t feel justified because I had lost my childhood home

[RedInnocent69]

It might be. Do you want a house? Presumably you can afford one. What’s confusing you?

[Asker]

Yes a house would be nice, and what confuses me its because it's just me working. I'd be the only one paying all the bills you know

[RedInnocent69]

How much equity do you have in your condo (ie, the value you can sell it for minus the amount you still have owing)?

[Anonymous]

I don't own even an apartment, let alone a house.

[Asker]

yeah it's hard nowadays isn't it, luckily I got my condo at a good time

[Opinion Owner]

Yes, indeed, very hard.

[In_Trance]

Talk to a mortgage broker