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- December 12, 2011 at 1:22 pm #237002
I have purchased my living home by 2006 at appx 730k price. During this economic downturn, the value went up and came down. This is in very good school district and hence retained the value. Presently, as per my Realtor,it stays at the same level of 710k-730k after deducting expenses & real estate commission. I have appx 720k loan.
Presently, I am 55 years and I am looking for retirement in next five years. At this time, I wanted to be safe and get rid of my loans or downsize my loans to home at 300k value.
My realtor, who helped me purchase the home, suggests me these options:
1. Keep staying the home, pay off debt, and then sell at 65 age so that I get 500k (or whatever home value appreciates) tax free real estate tax free appreciation. She is telling me – stay in the same home as long as you can and the home will appreciate in next 10 years. Since this is in good school district, she tells there will be good value after 5 or 10 years. In this option, my monthly payment is $3500 appx.
2. Buy a new home with 300k range and rent the current home. Since the rental market is good, I can get good return so that my expenses (including property tax, mortgage+other expenses) match with rental income. All I need to pay is principal portion of my loan monthly payment. By this way, my Realtor says that I get depreciation benefit. I can later sell my home after 5 or 10 years when I really retire and get back all the money at that time when my home sells. In this option too, my monthly payment comes to appx $3500 (new home payment + old home principal portion).
3) Sell my home (720k) and buy a new home (300k). Realtor says that it is not right option as I am selling my current home (good place, even now selling fast) without any appreciation and new home (not in good school district, may not appreciate well) may not give me any benefit/appreciation except reduction of loan. My Realtor is telling me, “Trust me, I am in this field 30 years. If I sell your home now and help you purchase a new home, I may get benefit/commissions, but this is not the right time for you as you have another 10 more years to go”.
What is my best option?
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