Would it be a bad idea to sell our house and rent instead?

We have 17 years left on our massive mortgage. Don't want to extend the mortgage term as we will by then be retired. We could sell, and rent a suitble property for about half of what we pay now in mortgage - and have more disposable income to enjoy. It feels odd to think about renting, having owned our own home for many years, but why not? We won't own our house outright until we are both 68 - we could be dead by then!!
Additional Details
We have 17 years left on our massive mortgage. Don't want to extend the mortgage term as we will by then be retired. We could sell, and rent a suitble property for about half of what we pay now in mortgage - and have more disposable income to enjoy. It feels odd to think about renting, having owned our own home for many years, but why not? We won't own our house outright until we are both 68 - we could be dead by then!!
We have looked at downsizing but would not have enough equity in this house to significantly decrease the mortgage on a smaller house - we really stretched ourselves to get this one cos it was perfect for us with all the kids at home.

Keep in mind, you will then have rent to pay when you are retired, when your mortgage would be just about paid off...

If you have lived in the same house for that long. You must have some equity. You may not own the house, but if you sold it you would own the difference between the sales price and what you owe. Every payment makes this amount larger and larger. When you rent you are just paying someone elses mortgage. Sell your house and downsize if you want smaller payments.

Keep your house. If you have children, it is something you can use to enjoy time with extended family later, as well as some security for your kids after you die. Also, if you wind up needing alot of money once you are retired, you can sell the house then and be financially secure for the rest of your life. (And maybe have something to leave to your kids). Keeping your house is more long term security. Renting in order to have more money now is very shortsighted in my opinion... at your age, you should be saving as much money as possible for the future - not going for disposable income now.

Sell your home and buy something much smaller and more affordable.

I would sell and down size to a more afordable home.

Renting should be a last resort.

Yes you could be dead in a minute. So can any of us. The one thing you may want to consider is that in 17 years the rent is going to be more than your mortgage payment is now most likely. But...if you keep your house...in 17 years you will not have any rent or mortgage payment. Owning is always better than renting if your circumstances are such that you are still able to own. Renting is just giving you a place to live...that's all. You have no place of your own, you have no asset, you have no equity, you have nothing to sell if devistation hits. Sometimes all a person has is his home and it is always worth a lot of money if it has been kept up and there is no better investment around because there will always be land and it is not going to change or go away and will always be worth some money. Even if your house is no longer standing....you still have the land. Land is constant. It is always always going to be there until the end of the world and then What? No one knows where it will be then. If you can do it.....please keep your house. When you turn 68 you will be so happy you still have it!

Good idea if you are sensible enough to stash the cash you make and not spend it - if you are in the UK or US you will probably be able to buy a house for half price by this time next year

It could be better for you to rent. There are so many pros and cons to both. Why not sell your house and get another with a smaller mortgage if you would still like to own. Think of the tax benefits and consult your broker. You might also be able to refinace and get a better rate. You could also pay an extra $100 a month towards the principle only and pay your house off 7 years earlier. There's a lot to think about! Good luck!

Hi there,

Downsizing doesn't always release a lot of funds; as you say. I do understand where you are coming from.

However, have you really truly considered all your options? There has to be a way of downsizing your mortgage - whether that's choosing a smaller place or an area that isn't number 1 on your list. It all depends on your flexibility. For example, my boyfriend and I have just sold our 2 bed apartment. We were going to buy a larger, nicer apartment that would have cost about the same. Instead, we've decided that we want more disposable income and have opted for a cheaper studio apartment. Sometimes the only way is to compromise. But the cheaper mortgage means that we can spend the extra money - or save it if we wish to buy a bigger place again.

Not to be offensive, but the risk with leaving your mortgage now is that if you changed your minds in a year, you may find it difficult to be approved for a mortgage in the future due to your age. My Dad never had a mortgage and when he hit 45 nobody would give him one.

Have you thought about inheritance and things like that? Is it something that concerns you, or not? It's just another thing to think about - as obviously if you live until you're 70 and you then own the home, your children could receive all of the money from your house. If you do rent, and you have no money remaining from the sale of your home, there will nothing to give them. Not that this is really the be-all-and-end-all of course!

The main thing to think about is the future. Think forwards to when you're 65 and ready to stop working. If you own the house at this point, you could have a very comfortable retirement indeed! If you are renting, you'll have to make sure you are getting enough money from somewhere.

The other thing to think about is to extend your mortgage term to decrease your monthly payments. I know you said there's no point as you might be dead by the time you pay it all off (lol!), but whatever's left will be paid when the house is sold, and you'll also have a little more disposable income.

Overall though, I think you are very intelligent to think about quality of life over quality of dwellings.

I would seriously look into more options in terms of downsizing and trying to get a smaller mortgage.

One final thing to consider is the reality of renting. Some landlords will not allow you to paint or hang anything on the walls. Most landlords visit at least once a month. Many landlords unfortunately do not allow pets or smoking (if these apply to you). When I was growing up, we lived in a rented house. We lived there for 15+ years and the landlord was happy for us to treat it as our permanent home and never visited for spot-checks. He also had no problem with our 3 cats! So sometimes it can work out. But as an adult, I've found that I just can't settle when renting. I'm renting a place at the moment and we aren't allowed to have pets (although we have 2 cats - we weren't going to give them away!!), we aren't allowed to smoke inside the flat, we aren't allowed to hang pictures or paint, etc. I personally can't wait until we own our own place and can do whatever we like. Don't take your current freedom for granted, is all I'm saying.

It might seem like there's a mountain to climb, but my advice would be to try and stay on the ladder somehow - unless selling your home will give you a big lump sum of money that you can invest for the future for inheritance for your children / extra money when you are retired / etc.

Good luck with whatever you do!

xx Emmie

Right now you might be better off waiting until the market is better to make some money. Its a buyers market.

Not really a bad idea. At the time of retirement, you'll have more money and then decide if you want to travel, etc. Odds are, whatever home you are in now, you won't be in after you retire.

Bad idea to sell now. It would have been a good idea to sell before real estate prices crashed. Hang in there to get to s decent price and then buy a home you can afford. Renting is not a good option because you simpy lose your money. At least with your house payment, you're buying the associated asset; your house.

Thats a weird question. Okay you do know you can pay extra toward you payment right? Lets say your payment is 1000 a month and you pay 1100 a month. That all goes to principal and all the sudden you house pays off in 10 years not 17 years. My figures might be off I dont know your interest and loan balance but any loan officer that has a computer can tell you or you can google it.

As to the Rent Vs Own option. Remember when you rent nothing is tax deductable. When you own all your interest and taxes are deductable. So if you are in a 30% tax bracket that new rental you are looking at that cost 1300 a month compared to your home that cost 1500 a month. Which is cheaper? The 1500 a month home. Missing that tax decution will cost you 300-450 a month in tax breaks. So your net might cost you 250 more a month because you dont have that tax break.

If you want to scale down, now is a good time. Homes are cheap and rates are low. So buy something you might want to retire in. You can still get a 30 year mortgage and pay it on in 7. Just pay what you want.

Good Luck

but u may live to 70, 80+

dont sell house unless u have to..

rent could rise & u cd be in poor circumstances in a few years, & regret that u have no property.
hang on to your property if u can! ]
gd luck

living in a home with a mortgagees is better because you have property in your name. Renting all you have is the personal property you take with you.

hmm... if you want to speed up the selling of your house...

I had previously tried to sell my house at the estate agents using a photograph - without much success and had hardly any interest!

check out this website: www.drawmyplace.com - they do pen and ink drawings of your house - I had a beautiful drawing done of mine then advertised it at the same estate agents using the drawing... sold it within a couple of weeks at a higher price and with loads and loads more interest!

Maybe not a bad idea if you believe house prices are falling. You could buy back in a few years for a lower price maybe.

Bit of a risk though!

Are you making the mortage payment just fine, if not can you pay off some credit card bills or pay off a car, I would n't let go of my home, yes when you get ready to retire then sell the home and down size then you will have all that equity monies to live off of and travel

Seems to be what people are doing at the moment. Though have you not thought about down sizing? One way to look at it is as a part of your pension. Pensions are not working at the moment and property is about the only thing that is actually making any money. Think carefully before you do anything rash

In England, people, never 'really' own their 'home.' The Banks do. You (and I am talking in general terms) are their tenant. You keep on paying them (these peoples' greed has no bounds) by 'chucking gold coin down a bottomless pit.' Until you are too ill to continue, 'burned out', or; dead. Rent instead - the French do.

Enter Your Message or Comment

User Name:
User Email:
Post a comment:

Archive: Forum -Forum -Finance - Links - 1 - 2 - RSS - All RSS Feeds
The Causes and the Results. 0.044
Copyright (c) 2011 Financial Crisis Tuesday, May 29, 2012 - Terms of use - Privacy Policy