What's A Growing Family To Do?

This post by Kathy reminds me of my current real estate situation. When we got married, I moved into the small house that The Mrs. already owned. 1100 square feet seems like a lot until you put two adults who've been on their own for a decade into it together with a giant dog that constantly sheds. I think we adjusted pretty well, but it definitely resulted in a cluttered house. The spare bedroom became just a really big combination closet and junk drawer. The curve ball really came when we had to convert our spare bedroom for a new use. 1100 square feet was small for two adults and a giant dog, but it's absolutely tiny for two adults, two infants, and a giant dog. Babies take up a lot of space.

So now we're looking to trade up and have a similar dilemma to most people looking to buy their second home. Back when I was buying my first one it was easy. Just save up a down payment and write a check at closing. Now though, most of our cash is tied up in our house. We can pay for closing, but very little beyond that without selling our house.

So we should sell our house, right? I'm naive enough to think our little house might do okay on the depressed market. I'm hoping the small size will be an asset and the price tag will look appealing when people might be afraid to take on a bigger mortgage. It's definitely a starter house, perfect for a single person, or maybe a couple starting out. But one thing I remember clearly from when I sold my bachelor pad.... buyers are picky. If you're trying to sell a house it has got to be sparkling clean. Anybody want to speculate on how hard it would be to keep a house clean enough to show when it has two infants and a giant shedding dog that live in it? I even considered renting it for awhile until the real estate market improves, but then we run into the speed bump of not having a down payment unless we sell the old house.

The Mrs. and I have just resigned ourselves to buying a new house before selling our old. Now my research passion is figuring out how to make that happen with great credit, but little cash on hand. So far the only options to present themselves are to stick it out and try to save (very slow since we have one income and four mouths to feed) or finance 100% on the new place and pay a huge amount monthly until we can sell the old and refinance. Anybody know of a middle ground?


Anonymous Kathy T. said...

Hey "W" I understand what you're going through! I think you have a lot of options, actually, if you have strong credit. The first thing to do is talk to a lender. If you can qualify for both houses, you can borrow against the equity of your current home to be used as a downpayment on the new house. You'd have a first & second mortgage on your current house.

Then after moving out and cleaning up, you can sell your first home and be be back down to one mortgage payment on the new house. If you want, call me and I'll put you in touch with a lender who can give you more details about this and other options.

11:50 AM, March 13, 2008  

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