FACEBOOK has become an unlikely source of financial advice for many individuals who don’t have a professional financial planner.
One anonymous user recently asked the Facebook group “Mortgage Questions” for community tips on moving homes.
The public group has 67,000 members and is meant to help people understand home-buying decisions.
Dozens of people commented on the post, offering paths forward.
THE SITUATION
“Even though I’m 60 I’m completely illiterate about anything to do with a mortgage,” they said in a post. “So I’m trying to ask questions in a safe space.”
The user and their spouse bought a small home 19 years ago, they said.
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They got a 30-year mortgage, meaning their home is not yet paid off.
“We don’t have a lot in savings because we began raising our 3 grandchildren 10 years ago and it is what it is,” they said.
The couple now wants to move.
“However, we would love to buy either a home located with property out of town or buy property and build,” they said. “The issue is that we would need to sell our current home first in order to afford to do that.”
“I feel like I’m in a catch-22 with this,” they said.
THE ADVICE
Commenters offered many solutions.
One said to try refinancing, to get enough money for a down payment.
This would allow them to keep both properties.
“Depending how you feel, you could potentially rent out the current place and use some of that rental income to help qualify for the next place,” they said.
Others suggested a common solution for those looking to move — contingency.
“You can make your purchase contingent on selling your current home,” another said. “That’s probably the least expensive way to go or you can get a bridge loan.”
Bridge loans are shorter term and meant to be repaid within one to three years.
Everyone’s financial situation is different, and it can be helpful to seek professional advice before making any major homebuying decisions.
Escrow and mortgage increases explained
What’s an escrow? Why did my mortgage payment go up?
Escrow accounts are set up to help homeowners cover insurance, property taxes, or other home-related expenses.
If you have an escrow, part of your monthly mortgage payment goes towards the account.
The escrow management company then uses the money in the escrow account to pay for taxes and insurance when those payments come due.
Essentially, the escrow bundles these other charges with your monthly principal payments, making them easier to manage. This is meant to make homeowners less likely to default on their payments.
If the government’s annual valuation of your home determines that your property taxes will go up, the escrow payments can spike as well, meaning that even those with fixed mortgage payments can find themselves forking over more cash every month.
MORE MORTGAGE TROUBLE
Another Facebook user recently shared how she believed taxes were to blame for her rising mortgage cost.
Payments can fluctuate even for those with fixed mortgages.
A real estate broker and influencer recently explained how escrow is often to blame.
The system is meant to help people pay their taxes and insurance, but it can also lead to surprises.
One homeowner said she felt bamboozled by a price change.
Another called her sticker shock “ridiculous”