@Lvs23 don’t be sorry. I’m sorry if I left this out, but I’ll continue to live in the house and the whole property will transfer to my name. I asked because there are some pretty dam smart people on here and I know a lil but I know I have a lot to learn in the area of finance. That is why I came here for advice. Out of all the people I have come in contact with and went to for advice, nobody brought this point up. Thank you.
@anurag_anurag2005 thank you for the advice and for running the numbers.
Regardless, you’ll be still paying the interest on the entire mortgage and it isn’t a small one.
2x siblings + 180k payoff + 10k debt + 8k cash = $548,000 -> that’s $20k less than you stated.
Assuming any tax reliefs in your mortgage viability and economic sense is a bad idea in my humble opinion.
Rates are low now but I’d rather hold off and work on your credit - every 1% on the mortgage makes a huge difference. Same as additional principal payments.
I honestly believe you should sell this unless you are planing to live in this house another 20-30 years. I don’t know SF Real estate market that much but I think you are closer to the top with these prices than bottom.
Just don’t be upset if possible in 5 year the house will Ben worth half like it did in 2009 and your siblings just sitting in cash while you struggling with mortgage.
This is just devils advocate thinking of adverse situation.
@menotknow sorry everything isn’t adding up but I rounded off the numbers but the total cost of the loan is about $12,000 1.5 points.
@Lvs23 it is actually Los Angeles County. South Bay Area. Homes go anywhere from 7-900 k in the neighborhood. The value of the homes in areas that were once considered bad neighborhoods have gone up to about 600k.
Appreciate your advice guys! Thanks for taking the time out of your day.
My banker has a program for certain SoCal neighborhoods (“diverse underserved communities”) where they offer zero-cost refinancing at below market rates. If you are interested, PM me and we can get into more specifics.
I refied 2.5 years ago into a 2.95% 30 year fixed. Expenses were paid outside of escrow with title and escrow fees credited by the lender. As of a couple of weeks ago their rate was 3.15% on the 30FRM. Obviously if your credit is not top tier, then your rate would be higher. But if you qualify for the program you would save a lot on loan costs and probably lock in a lower rate as well.
Also, another reason for selling now if you are not in the house long term is because you would bear all broker costs if you sell this on your own. Whereas if you sell now, you and your siblings would share in the commissions equally.
Guys, a big factor in our decision to keep this house is we get to keep the property taxes low. California has a proposition that they can only raise taxes by 1% every year. My parents bought the house more than 40 years ago. I pay taxes on an assessed value of $77,000 about $1,000 a year.
If I were to buy a house for let say $600,000, my taxes would be on an assessed value of $600,000 around $6-7,000 a year.
I’m aware of that rule. That isn’t much of question.
Can you elaborate why you want to keep the house? I’m sorry to try to dig deeper but we are now talking probably emotions vs logic.
So I want to understand how much of emotions involved because it’s your parents house.
@Ampersand yes you’re right. Never thought of it that way either. How much do realtors charge these days? Like 6%? Ouch! Thank you and I think I’m now leaning more on the sell side. I’ll show my wife all this amazing advice I’ve received this morning. Thanks guys!
@Lvs23 really just looking at it from an investment point of view. School district is great. Highly sought after area. I live close to the beach. The closer you get to the Pacific Ocean, the more expensive it gets.
Another way to think about it – Would you buy this house today for $710k? Or would you rather rent a place, or buy another house for the same amount or less?
What is the size of the house? If you’re okay with downsizing, maybe you could get a less expensive place and a smaller mortgage to have lower overall expenses (even with difference in property tax factored in).
I’m not great expert at investing at real estate as others here and not much of trends in LA specifically but I think the main point of investment is to sell high buy low.
My personal view you are closer to “sell high” point.
It’s just my advice on internet:) lol
@optuna That’s a great way to put it. Yes we may have to move out of the market. Thanks!
@Lvs23 It’s great advice. I definitely see the market slowing down. Not as many people driving around on the weekend for open houses this year compared to last. One person I spoke to believed that the home would be worth a million in a couple of years. Lol. I don’t know about that.
I received a loan estimate but seems like there are many double dibs in the costs section, and the broker is not clear how much out of pocket I need to come up with. Are there any loan officers, brokers that can review the document and help me??
