My husband got a job with a 40% salary increase in a city two hours away. Should we sell our beloved 24 year old home and buy? or rent?

Dear MarketWatch,

My husband got a job offer that gave him a 40% salary increase. But we have to move to a more expensive city two hours away. We have lived in our house for 24 years, we have no debt left to pay.

We have nearly half a million assets: $150,000 in cash savings accounts, $25,000 in taxable investment account, retirement savings, and we’ll also get $200,000 from the sale of our home. I also work from home, no loss of income there.

Given the rise in mortgage rates, and the fact that prices haven’t come down yet, should we sell our current home and buy a bigger one, or rent out a one-bedroom apartment for $1,700 a month and wait until things calm down?

what should we do?

sincerely,

Confused homeowner

big moveIt’s a MarketWatch column that delves into the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.

Do you have a question about buying or selling a home? Do you want to know where your next step should be? Email Aarthi Swaminathan at [email protected]

Dear perplexed homeowner,

Moving out of your home for 24 years is a big decision. But the first thing you need to do is think about how well you know this new city.

I said it’s about two hours away. Have you lived there before? How often do you visit it? Do you know the living? Are you content with groceries, shops, restaurants, gyms, etc.?

If this is a whole new adventure for both of you, then renting a one-bedroom apartment for a year with the feeling of being out of town is a good idea. “It gives you plenty of time to get to know the area and choose which neighborhood you’d like to move to,” Christina Morales, a Cleveland-based realtor with her own company, Christina Morales Real Estate, told MarketWatch.

Especially with mortgage rates that were much higher than they were last year — at 5.3% on the 30-year fixed rate — and with current home prices that haven’t gone down yet, it might be a good time to start looking, but put off the commitment to selling your old home.

And besides, you also likely have a lot of memories from the 24 years you spent in that house. It is a huge advantage to have in your back pocket, and this home and land will continue to be appreciated while you are just looking.

While I don’t know where you’ll live and what city you’ll be moving to, which are two important points that will inform any purchase or rental decision, there are exceptions to rentals.

For example, if you live in the deep area of ​​New Jersey and are considering a one-bedroom rental in New York City, this might not be the best idea at the moment – rents in the city are on the rise. In some parts of the country, you may pay more rent than you would on a mortgage.

On the other hand, if you’re familiar with the new city, and you’re starting to leave 24 years behind, maybe it’s time to buy. Especially if you’re planning on staying for another 20 years in this new home, it might make more sense to put that money into a mortgage rather than rent.

Remember to think about how much you plan to fund, Morales emphasized. You said you’d get $200,000 selling your old home. “If the loan amount is relatively small due to the application of proceeds from the sale of the house, I will be inclined to buy,” she said.

And if you’re planning to live in this new home for a long time, Morales added, “remember that you can always refinance your rates when prices improve.” “However, you cannot change what you originally paid for the house.”

Bottom line: You don’t need to make all the decisions right now. You need to find out if your husband loves his job and if you both love your new city first. Once your home is sold, it is something that cannot be undone.

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