Is anyone selling their house with 2% mortgage to move to a better house?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
User avatar
Watty
Posts: 29455
Joined: Wed Oct 10, 2007 3:55 pm

Re: Is anyone selling their house with 2% mortgage to move to a better house?

Post by Watty »

cowbman wrote: Mon Jul 08, 2024 1:56 pm
Starbase wrote: Sun Jul 07, 2024 8:34 pm My partner wants me to sell my house where I have a 2.35% loan to buy a new bigger house with a 6.5-7%. Our payment would go from $2000/month to $7000/month.
I keep telling her that for that $5000/month we can go on vacations every weekend, but she is a hard one to convince. Has anyone here abandoned their 2% mortgage for a better house?
No, this forbidden, this is why younger folks can't have homes. Older people who may want to downsize, move, etc. are not "allowed" to give up their low rates.
A high percentage of us "older folks" paid off our houses before mortgage rates got ultra low or had small mortgages where interest rates were not a big factor.

I would love to move to a smaller one level ranch house with a smaller lot which costs less than but those have not been built in this area for decades so the few that are available are often run down, is bad neighborhoods, or in expensive senior communities and cost more than out current house.
cowbman
Posts: 765
Joined: Sat Jan 14, 2017 1:10 pm

Re: Is anyone selling their house with 2% mortgage to move to a better house?

Post by cowbman »

Apologies, I was being snarky.
cowbman
Posts: 765
Joined: Sat Jan 14, 2017 1:10 pm

Re: Is anyone selling their house with 2% mortgage to move to a better house?

Post by cowbman »

rockstar wrote: Mon Jul 08, 2024 3:26 pm
cowbman wrote: Mon Jul 08, 2024 1:54 pm
PNWpilot wrote: Sun Jul 07, 2024 9:37 pm
Starbase wrote: Sun Jul 07, 2024 8:34 pm My partner wants me to sell my house where I have a 2.35% loan to buy a new bigger house with a 6.5-7%. Our payment would go from $2000/month to $7000/month.
I keep telling her that for that $5000/month we can go on vacations every weekend, but she is a hard one to convince. Has anyone here abandoned their 2% mortgage for a better house?
With that interest rate, I’d get a new partner before I got a new mortgage.
:D but divorce could cost more.
Should save money and hire a nanny to move this along :)
👍
moneyflowin
Posts: 314
Joined: Sat Oct 16, 2021 6:14 am

Re: Is anyone selling their house with 2% mortgage to move to a better house?

Post by moneyflowin »

"I won't give up my 2.5% mortgage" is another way of saying "Houses are too expensive". If prices dropped to the point they equalize with a 7% mortgage, homeowners wouldn't care about giving up their mortgage.

Put another way, what if rates fell back to 2.5% but houses increased 40% because of it? You still wouldn't move.

Another point: 36% of homeowners have no mortgage so they shouldn't feel tied to their rates, yet they're not moving either.

Rates soared throughout the 70s and early 80s, yet that didn't stop people from giving up their lower rates... because ample supply of new construction kept prices in check.

The real issue is that current housing prices, when factoring incomes and interest rates, are too high. They should have dropped when rates surged, but didn't because the country has been underbuilding for 15 years.
bltn
Posts: 1933
Joined: Mon Feb 20, 2017 8:32 pm

Re: Is anyone selling their house with 2% mortgage to move to a better house?

Post by bltn »

texas lawdog wrote: Mon Jul 08, 2024 6:31 pm You need to think about what your target rate should be in the context of your overall financial strategy.

How long are you willing to wait out interest rate decreases to get the rate you want? Also realize that everyone else will be doing the same.
Perhaps rationalize that mortgage rates are somewhat "normal" now looking back over 30 years and they may never return back to the low rates we experienced.

Life is short and I wouldn't let a somewhat elevated rate keep me from moving forward unless it jeopardized your financial strategy.
This is very good advice. Particularly the point that interest rates currently are about normal based on recent history. People with 2% mortgages got once in a generation bargains on their mortgages.
Agree that if my overall financial plan accommodates the higher house payment, and this next move was thought to be long term, I d go ahead with the move. If rates drop, I d refinance.
Ependytis
Posts: 645
Joined: Mon Oct 17, 2016 11:10 am

Re: Is anyone selling their house with 2% mortgage to move to a better house?

Post by Ependytis »

For my partner and I to spend $5000 a month more for housing, there have to be a really compelling reason. The compelling reason would be we lived in a drug infested, crime infested neighborhood, or the schools were so bad I’d be forced to send my kids to private school, which would be equivalent to the $5000 a month increased House payment. Other than these reasons, I can’t fathom other reasons why I would willingly pay $5000 a month more for a house.
jfmiii
Posts: 162
Joined: Fri Apr 25, 2014 1:36 pm

Re: Is anyone selling their house with 2% mortgage to move to a better house?

Post by jfmiii »

No way. Never selling. I am never giving up my 2.875% 30yr fixed mortgage (25 years left).

We bought the home in 2019 with the view it would be a long term (10+ years) home. We will never move except maybe in retirement. Not only in the mortgage rate giving me a free carry trade with money market funds at 5%, our home has appreciated about 50% so upgrading the home would cost significantly more due to both rates and price.

Our kitchen/dining area is a really poor layout. We are doing a 6 figure renovation this fall to make the home perfect for our needs. It is much cheaper than moving.
Post Reply