Suggest your best advice?

I took a home loan in dec2017 at 4%, 30 year Fixed rate.Now I have around 400K remaining.My monthly payment is $2666.40

Principal $810.73

Interest $1,366.28

Escrow (Taxes & Insurance) $489.39

Total $2,666.40

My property value went up by around 10k only.I noticed that in the same neighbourhood I can get a similar rented home at around $2000 a month.And I am paying $360 per month towards HOA.

Any suggestions to reduce my monthly payments.or do you think its better to sell my home and move to rental unit.Give me your suggestions?

Update:

Should I approach another bank to get a better rate ?What are my options

4 Answers

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  • 3 weeks ago

    Where are you located ? / how is the housing market and growth (which also sets rental prices). Anyway, your pmt of 2666 - 800 principal (which you will get back under normal circumstances) = $1866 lost money - which is less than the $2,000 rent you would pay so I would keep it if I had the money. Plus, the "lost" money will decrease and the equity will grow over time (principal up, interest expense down; and resale value up). 4% is quite good, but idk what the market rate and refi costs are now. [I cringed at the HOA fee, but ... maybe it is worth it.]

  • Eva
    Lv 7
    3 weeks ago

    You will continue to build equity in the home your purchased. Paying rent is like flushing money down the toilet. The commission for selling your home would eat up any gain you might have, but if you did have a gain, it would be taxable unless you waited to sell it until after you had been in it for a full 24 months. If you had a loss, it would not be a deductible loss.

  • 3 weeks ago

    What is your income? Is the $2670 monthly payment crippling your ability to do other smart financial moves?

    If you're able to pay the monthly payment and still cover living expenses like food, gas, etc and do at least some basics like funding your 401k, then stay the course - keep paying your payment, and consider shopping around for a refinance to get a lower rate and/or lower payment.

    If you are putting groceries and utility bills on credit cards because there's nothing left after you pay the mortgage, then maybe you need to sell and move to an apartment  - if you can rent a house in your neighborhood for $2000 then you can probably get a smaller apartment for $1200-$1500.

    Don't get too caught up on comparing the mortgage to the rent. You own your house, you're paying off $800+ of mortgage debt every month, you are building equity as the housing market appreciates, and you have the stability of ownership.

  • 3 weeks ago

    It doesn't matter what the rental market is in you area.  You are purchasing a home.

    I don't think it's better to sell = you have already earned $10K in 2 years. 

    Whys to reduce your costs:

    - you might be able to re-fi and get a slightly lower rate.  Do you have 20% equity?  Do you have a credit score over 740?

    You can see if there is less expensive insurance?

    • A Hunch
      Lv 7
      3 weeks agoReport

      I meant 20% equity.  Thanks for bringing my typo to my attention

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