Housing | Imamother

amother

Mon, Aug 02 2021, 9:13 pm

We are buying a house in Lakewood. It’s costing us a fortune and we don’t think we will be staying in the area for long. (Need to be in a certain area now for schooling but will be able to move to a place we want later on out in Toms River)
Are we making a very expensive mistake? We can’t find anything to rent and we need the bedroom space. We need this move now but I’m worried that we’re buying at the height and the market will crash when we need to sell.

amother

Mistyrose

Mon, Aug 02 2021, 9:18 pm

I’m confused. You plan on moving but you are buying now because you need that space? I’ve seen random rentals here and there in masa umatan. If you forsure plan on moving I would think it would make more sense to just rent anything for now

amother

Mon, Aug 02 2021, 9:26 pm

Yes we must be in the Lakewood district.
The rentals are insanely high on what we want so someone suggested using that money towards a house instead and then selling

amother

Purple

Mon, Aug 02 2021, 9:32 pm

amother [ OP ] wrote:

Yes we must be in the Lakewood district.
The rentals are insanely high on what we want so someone suggested using that money towards a house instead and then selling

If you plan on selling within a year or two I don't think that's a good idea. Run the numbers yourself to see if it makes sense but I doubt it.

amother

Purple

Mon, Aug 02 2021, 10:05 pm

Closing costs + ( mortgage * 24 months ) + inevitable maintanence + real estate agents fee (6% when you sell)

Compared to 24 months of renting with zero maintenance costs

amother

Purple

Mon, Aug 02 2021, 10:06 pm

Cmon be nice wrote:

Also if you sell within 2 years of buying at a profit, you'll be subject to capital gain taxes (ask your accountant for details)

I think it might be one year but yes something else to think about.

amother

Mon, Aug 02 2021, 10:09 pm

Wow 6% agent fee, I had no idea.
It sounds like if I wait two years and I don’t have much maintenance, what I should be worried about is the agent fee and the money down.
Thank you very much!
The rental pricing is so high it’s a crime to just wash it away instead of putting it towards a mortgage I would imagine.
Do property taxes factor in?

watergirl

Mon, Aug 02 2021, 10:12 pm

amother [ OP ] wrote:

Your OP made it seem like you are already under contract for a particular home. Whats the story? Do you have what you need for a down payment in that area? Yes, property taxes must be paid and they are high in Lakewood. Please do more research before you jump the gun.

lfab

Mon, Aug 02 2021, 10:22 pm

Another factor to remember is that in the beginning you're mortgage payments mostly go towards interest. Very little goes towards paying off principal. So if you sell in a few years, even if prices stay stable and don't crash, you won't have much equity in the house (besides whatever you put toward a down payment initially) to put toward a new home.

Amarante

Mon, Aug 02 2021, 10:25 pm

If you plan to move in a year or so, it makes no financial sense to purchase a home.

When people said run the numbers, actually add up all of the costs that you will incur when you buy the house and then when you sell it. You pay to originate a mortgage; you pay 6% to the broker when you sell; you pay title insurance; you pay escrow fees. Until you have actually purchased a home you don't realize how all of these line items add up to a fairly significant amount.

It is unlikely that the equity in your home will have gone up enough to offset those costs. Meanwhile you will have gone through all of the aggravation of purchasing a home and then selling it.

Also there are often costs when you move into a home that aren't when you rent a home. For example, many rental homes come with window coverings and many homes do not come with window coverings.

amother

Mon, Aug 02 2021, 10:25 pm

watergirl wrote:

No we are not under contract, we are in middle of attorney review.
Worried we are missing the full picture. The agent told us we can sell later.
We have the money for the down payment, we were hoping to not use it until our future home but we need the rooms and throwing away $3000+ in rent for the next unforeseeable years seems wasteful. We don’t know how long we will have to be in Lakewood township before we can move.
For reasons I’d rather not discuss, we can’t move to our dream area right now, we must be in real Lakewood.

Cmon be nice

Mon, Aug 02 2021, 10:37 pm

amother [ Purple ] wrote:

I think it might be one year but yes something else to think about.

It's two. Official rule is you had to have lived there for 2 out of the last 5 years

amother

Jetblack

Mon, Aug 02 2021, 10:43 pm

My guess is a mortgage broker or your accountant would be able to help you figure this one out. I wouldn't go with what your agent has to say, they are just trying to make a sale.

amother

Lime

Mon, Aug 02 2021, 11:04 pm

Is it an option to buy a house in Toms River and rent it out until you are ready to move in? That way you won’t have the hassle of reselling or lose money from it. You also won’t feel like your throwing away money on rent because you will have someone renting out your property.

amother

Mon, Aug 02 2021, 11:16 pm

Amarante wrote:

Would you say the same if we would make a decision to stay there for 4 years?
Also, what do you think regarding the market? Do you think that the bubble will burst?