Hello Reddit,
I may have an excellent opportunity at my job to take an overseas delegation to Europe. My girlfriend and I currently have a home in NJ and are trying to plan ahead when the opportunity comes up, what we should do with our home here.
My company will pay for my housing in Europe which is an amazing perk. The reason they do this, is so that I could afford to pay my mortgage in the US and keep my home if I so chose. The downside is that if I sell the house, and take any loss, the company will not reimburse for those losses (which they do for domestic relocation).
The opportunity would be a 36 month delegation, most likely starting January 1, 2018.
A little about our house: We purchased the home June 1, 2017 and only put 5% down. We still owe ~$350,000 on the loan @ 4% interest rate. Our mortgage payment is approximately $1700/month, mortgage insurance $300/month and property tax $1000/month. So we are paying about $3000/month for our home. In addition we pay about $120/month in homeowners insurance.
Option 1 (Sell the house): Now, my thought is that if we sell the home before we leave, then we will be saving $3120/month. Over the 3 year span this should amount to ~$112,000.
Option 2 (Rent the house): If we rent the house, I know a couple who would rent it for $1600/month. I know there are risks associated with renting, but I want to view this purely from a financial standpoint. If they were paying rent to us, over those 36 months, I believe we would generate $58,000 income. In addition, we would be building equity in our home for those 3 years. I've used some excel sheets to evaluate this and we should generate $21,000 in equity in our home by the time we return. Although, we would still only have 13% equity in the house, so we would still be paying mortgage insurance for a few years when we returned, if we were to make the minimum payments.
I would add an option for paying our mortgage as normal, but also applying the $1600 in rent to the principle also to hit the 20% equity faster, however I have $48,000 in student loans @ 7.4% which I believe would be more beneficial to pay off as quickly as possible. And this can be achieved through either option, but would be faster with option 1.
Please let me know your thoughts! I am also assuming that my salary will be adjusted upward to compensate for any loss of income that my girlfriend may face during the delegation.
Submitted April 08, 2017 at 06:30PM by scatrun123 http://ift.tt/2od5Ql0
