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Our Lady's Loom, Larder, and Laundry
 4Real Forums : Our Lady's Loom, Larder, and Laundry
Subject Topic: renting your home/carrying 2 mortgages Post ReplyPost New Topic
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LML22
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Posted: Sept 22 2012 at 11:45am | IP Logged Quote LML22

We have had our house on the market for 1 1/2 years. We had a contract on it and it fell through 2 weeks before closing.    Since we got a contract, we found a new home and put a contract on it. We put money into it (inspections, option money) that we can't get back. We have been trying to sell to move closer to the monastery we attend Mass at and to our friends. Right now we are an hour away, and we are there at least twice a week. If we lived near there, we would attend the Divine Office and daily Mass. Dh and I are thinking long term; we would love to do this even after the kids are gone. Our kids are getting older and all of their friends live in that area. They are lonely.
Does anyone have experience with renting a home to someone else or carrying 2 mortgages for a while? We do have a relative that can stay in our one we are trying to sell after the new year but wouldn't be able to pay the full mortgage.
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ShannonJ
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Posted: Sept 22 2012 at 12:34pm | IP Logged Quote ShannonJ

So sorry to hear this! The market is still really tough in a lot of areas. We are currently renting out our home in FL since the market there seems to have no bottom.

While we have been fortunate enough to find and keep a good renter so far, I would advise that you try to stay put unless you absolutely have to move. I know it is hard and sometimes heartbreaking, but carrying two mortgages can put you in a tough spot really quickly should you lose a renter or need to do repairs on either house.

You may lose earnest money and inspection money on the new house, but consider having no renter in your house for x number of months. Would you be able to carry the cost? If so, for how long?

Would your relative be signing a contract for 1 year? More? How much of a difference will you need to make up? Will they help you out in providing a show ready home so that you can keep trying to sell in exchange for the discount in rent?

If you rent to someone else, consider the going rent prices in your area. Will you use a landlord? If so, what do they charge? (10% is the common rate, plus tenant signing fee). If you are planning on being the landlord, be prepared to deal with evictions if you get a bad renter. Unfortunately, the process can often be very long and difficult. Also make sure you have an excellent contract, and agreements on how to deal with maintenance (house and yard), and repairs.

Basically it all comes down to the numbers. Only you can ultimately decide the right move for your family, but waiting for the house to sell will put you in a comfortable financial position; whereas, moving now could be a roll of the dice. I wish you the best in your decision process.

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CrunchyMom
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Posted: Sept 22 2012 at 12:54pm | IP Logged Quote CrunchyMom

No personal experience, but I was talking to someone recently who is in that position except their challenge is having bought at the height of the market, and now that they can't live in the house because of moving for dh's work, they are renting it...as well as renting the home where they are currently living.

She spoke of how hard it is to find good renters, and now that they've got decent renters who will always pay eventually, they still can't depend on having that money in a timely fashion. If you can afford both mortgages, I think it could be doable. But unless that is the case, I think you might just have to take your investment into the new home as a loss unless you happen to get a new contract while it is still on the market. We did that on a home when we were looking. It all worked out for the best, but taking that hit after investing so much money as well as the emotional investment was really hard.

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guitarnan
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Posted: Sept 22 2012 at 3:10pm | IP Logged Quote guitarnan

As a several-time landlord, I can attest to the problems associated with renting. One that has not been mentioned is that damage to paint, carpet, etc. is wear and tear, and those repairs are not tax-deductible...even though it is very hard to rent out your house when there's a huge kool-aid stain on the carpet, caused by a previous tenant. You end up having to replace the carpet, eat the cost, and watch the next tenant wreck it.

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ShannonJ
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Posted: Sept 22 2012 at 4:44pm | IP Logged Quote ShannonJ

I also wanted to come back and ask if you had a clause in your purchase agreement contingent upon the sale of your current home. This is fairly common nowadays, making it possible to have your earnest money returned to you.

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kristinannie
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Posted: Sept 22 2012 at 9:00pm | IP Logged Quote kristinannie

We carried two mortgages for 21 months. We had several contracts fall through so I feel your pain. I would say that you need to do the math and see how long you could afford to carry two mortgages. We could do it indefinitely, but it took up all of our spending money for vacations, eating out, etc. It was a definite sacrifice, but we got our dream house and we got it at a very good price.

We thought about renting and even had potential renters come and look at the property. You just need to be really careful about that option. Look at your state laws before renting. It is VERY hard to get someone evicted now even if they don't pay their rent or destroy your property. Plus, you can't sell your house in the meantime.

The market is really picking up around us, but I am not sure about the market where you live. Pray about it A LOT. I will pray for your discernment as well.

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Erin
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Posted: Sept 24 2012 at 1:45am | IP Logged Quote Erin

We carried 2 mortgages for 8 mths when interest rates here in Aust were very high. It nearly killed us! and we lost quite a bit.
I can easily see the attraction to move closer to the monastery.
Praying for your discernment.

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AmandaV
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Posted: Sept 24 2012 at 3:21pm | IP Logged Quote AmandaV

We carried two mortgages for a while and it was very difficult. We got a renter but he paid below our mortgage for almost two years so we werent' saving. Then he couldn't afford it and left. We lost a tree in the back but overall the house was okay. Some general fix up. We put it back on the market substantially lower priced and dropped little by little with incentives and sold it within about 3 months. We are just now realizing how big an impact it had on us financially and stress wise. I would not do it again. The entire time I really regretted deciding to rent this house before we had a buyer. We bought this one when we thought our renter was buying. Then I regretted that, especially when he left. It was very stressful. I'd think long and hard about it.

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