Should I Sell Or Rent?
Here is my situation.
I currently live in a single family home in NJ which is worth around $250k. Our loan amount is for $140k. We are planning on moving to a nearby town about 30 minutes away. We can qualify for a loan to buy the second house without selling our current residence.
Should I sell our current house, or should I rent it? The house would rent for $1500 to $1600, and our payment would be about $928. From my basic calculations it looks like I would run a slight profit, even taking into account 10% vacancy, management, etc.
The main issue I see is with my cash reserves, which will be mostly depleted with a second house purchase. However, my wife and I have a fairly good income and could afford to carry both mortgages, although it would be very tight.
What advice can you give?
NK:
Thanks for the analysis.
Talk to anotehr lender and ask them their policy. Typically you need to wait 6 months, not 1 year.
Platty, what did you end up doing?
Remember that a draw against your HELOC is an adjustable rate loan, probably indexed to the prime rate. It could go up quite quickly.
If a refinance is possible, I suggest you consider a rate and term refinance for the combined amount of both loans to lock in a fixed rate for the next 30 years.
with rates as low as they are, and liberal seasoning guidelines, why note just do a rate term Finance, rather than in 2 steps?
Say this property is worth 50K, and will skill cash flow at that, why not take the make cash out loan (might be hard to get) and use that extra case as a "bank" for buying other foreclosures.?