I have a 5 year IO loan in the 4.x range – with a little over a year left before it adjusts, that’s why my current monthly is low.
I had considered dumping (should have last year). What’s always stopped me is if we move out and rent we are going to be spending ~20k/yr on rent. Effectively it’s depreciating at nearly the same amount my rent cost would be elsewhere.
I’m guessing I could dump the place today for $225-230k (maybe?). After fees, I’d basically walk away from the table not owing anything, but not leaving with anything either. Decent hit, but not too bad considering I’ve livered here ~4 years which helps ease the down payment loss pain.
If I live here another 2 years before buying (Dec ’09), that’s ~40k in rent. If 2 years turns to 3, that’s $60k… etc. If my bottom here is $180k, and I am going to live here at least another 1-2 years would it really make sense to bail now if I can only sell for $220k? Especially if I don’t need to sell to buy a new home. I can ride the market out on this 1 bedroom. (Part of the reason I bought a 1 bedroom to begin with)
There’s also a cost in moving out, then buying and having to move again should I buy a year or two later.
Also I agree that Dec ’08 will probably be early, so I’m leaning towards early ’09. But even then I do not expect that to be the bottom by any means. At the same time, after a few years into marriage it’d be nice to settle in a nice home. Especially if kids come into the picture in the next couple of years. Even if there is still another 10-15% correction left to go at that point – again there is cost in waiting, renting, etc.
Not an easy decision, and it’s been racking my brain.
