I bought my current home in 2022 for $424,900 with a 5.5% interest rate. Right now, it’s worth about $475,000 in my area. My wife and I had dual incomes back then, but we had our son eight months ago. He has special needs, which means my wife has to stay at home, and we’re really just getting by on my income. We’re meeting with a real estate agent on Tuesday to talk about selling and moving. Honestly, we’re feeling so overwhelmed, nervous, and stressed. As the provider, I feel like I’m failing, and I’m embarrassed that I can barely make our payments. We want to move to a townhouse and keep the cost under $350,000 for our next home. The interest rate is around 6.7% in my area based on my credit score. I’m looking for any advice, things to watch out for, and important questions to ask the real estate agent.
Honestly, if I were in your shoes, I’d consider selling the house and then renting. You could save your equity for emergencies. Downsizing might actually help you manage better. You’re not saving much with current interest rates, and if you put money into a down payment for a smaller house, you’ll still be responsible for any issues like a new roof or plumbing. Renting could relieve some financial pressure, especially with medical costs for your child.
Have you thought about selling and buying a duplex? You could rent one side and offset your income that way. Plus, as a landlord, you could write off a lot of expenses.
I get the instinct to sell, but usually, it’s not optimal. Why not consider renting it out? You could get some passive income from rent and still gain equity as the property appreciates.
It sounds like you might not be saving much by moving. If you put 20% down on a new place, you might only save around $100-$150 a month compared to what you have now.
You seem to be doing the right things. Your priority is caring for your family, and making this move could help with that. Just keep the communication open with each other about the decisions you’re making. I know how stressful it can be dealing with special needs. It’s okay to feel overwhelmed.
Consider taking the money from the sale and putting it in a high-yield savings account while you rent. Right now, it might be better to wait before buying again. Things could change in a few years, and you may find that renting works better for you.
Just a heads up, the real estate agents typically take $25,000 to $30,000 in commission, which could eat up a big chunk of your home’s appreciation. You might want to look into iBuyers like Opendoor or Redfin, who might charge lower fees.