When our family moved into our brand-new construction home back in January 2015, we had somewhat of an idea that we were potentially getting the last great deal in our bedroom community outside of Nashville.
But we didn’t realize that would mean the value of our home would increase more than $25,000 each year following.
In our neighborhood, houses are constantly for sale, and often are sold before a “sold” sign can even be posted in the yard.
My wife has been keeping up with the growing selling prices of our neighbors’ homes. It’s no exaggeration: We would easily make $80,000 if we sold our home today.
Contrast this to a decade ago when we bought a town home the year we got married, which happened to be right in middle of the The Great Recession. The value of that town home began dropping almost immediately. When we finally sold it in 2014, we barely made $1,000 off of it.
My wife and I are mutually obsessed with paying off our mortgage as soon as possible; as we have been debt free for 5 years now: No student loans, no car payments, no interest to be paid- other than our mortgage.
Last weekend was consumed by the quest to find out it would make more sense to actually downsize to a 3 bedroom, 2 bathroom, one story home in our area; compared to the 4 bedroom (plus a bonus room), 2 and a half bathroom, 2 story home we have now.
Even with the cost of other homes rising in our town, the $80,000 profit from selling our current home would greatly minimize our monthly payment; which we’re already paying several hundred dollars extra on each month.
We learned that ultimately, the amount of money we owe the bank would remain the same, but with the monthly payment being several hundred dollars lower, we could increase the amount we pay on the principle by that much more. And therefore, we could pay off our home years sooner.
However, it’s still a gamble…
Because at the rate our home is increasing in value each year, this means that two years from now by 2020, our home would be worth $100,000 more than what we bought it for in January 2015.
So while we are still open to the idea of downsizing in order to have a paid off mortgage that much sooner, it might be smarter to wait a few more years as our home continues to increase in value at the rate it is.
Therefore, it looks like our plan is to be working on simple upgrades for our home in the meanwhile, so that not only we will be able to enjoy our current home that much more while we are actually living it, but so that it will also be that much enticing for future buyers.
The problem is, I’m no Chip Gaines when it comes to my handyman skills. That will prove to be the biggest challenge for now…