First Person: What If We Hadn’t Bought Our House?

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With our house value down $70,000 and so many homes in our neighborhood in foreclosure, it's easy to play the "what if" game. We wonder what our financial situation be like if we hadn't bought our current home at the top of the market.

If we had not bought our single family home, we would still be living in a townhome I purchased in 2002. Because of Zillow.com, I'm able to see what happened to the townhome I sold in 2004, just before we purchased our single family home in 2005 during the housing bubble.

Would we be mortgage free sooner?

I had a 30-year mortgage when I lived in my townhome. The mortgage would be paid off by 2032. With my current home, the mortgage will be paid off by 2024 since I made extra payments.

Even though my house cost $183,000 and my townhome cost $107,000, I am paying about the same on now as I was before. That's because I had to pay higher taxes, CDD (community development district) fees and maintenance fees when I owned the townhome. We also took the profit from the townhome, and used it as a down payment on our house so our mortgage balance was lower.

Would we be able to sell if we wanted?

We know it's nearly impossible to sell a home in our neighborhood today without drastically lowering the price. I wondered what would have happened if we never bought this home. Would we have been able to sell our townhome in today's real estate market?

According to Zillow.com, our single-family home is only worth $109,900, which is $73,100 less than we paid. Meanwhile, the value of my old townhome is now worth $75,800, which is $31,200 less than my original purchase price. Even if we had stayed in the townhome, we'd be taking a loss. And, according to Zillow.com, it took the owners of my former townhome several years to sell even at a loss. If I had stayed in my townhome, I'd be underwater on my mortgage.

Would we have a better neighborhood?

Some of the homes in my neighborhood that are in foreclosure have been vandalized. But it turns out we would not have been better off by staying in my old neighborhood, even though it was a gated community on a golf course. Just as many homes in the "upscale" community where I once lived have gone into foreclosure. People complain about the increase in crime as well as traffic in the area where I used to live, which has become extremely built up. My current neighborhood is improving as developers plan to build an upscale mall with restaurants within walking distance to my house.

Although it's tempting to second guess real estate decisions, we know that we are better off in our house. Some of the newer homes in the area have Chinese drywall, which is dangerous and drastically lowers the value of the homes. My townhome was built just before the defective drywall was imported to the U.S. in 2001. Luckily, the builder of our single family home did not use Chinese drywall.

Overall, I think we made the right decision by moving when we did.

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