Buying new house,Sell\Rent current home? (Seattle)

[Sachin Sharma]

I am trying to buy new house in Seattle about 1M ,and have current home that has around $200k loan left, monthly I pay around $2500 mortgage (2.5% interest rate, 10 years left on 15 years loan). Options: 1) Sell the current home around $680K , take $480K extra cash and add as down payment in new house so less debt and save interest on less loan for 30 years term. 2) rent the current home with break even of monthly mortgage and rent in an assumption that prices will keep rising and keep it and pay off the loan in next 10 years. What you pro suggest? Renting a property definitely comes with some overhead of unknowns but has pros/cons in above options so looking for suggestions.

[John Barrett]

The interest rate on your existing loan is very attractive but earning nothing on roughly $480k would not be acceptable to me. If I were in this position, I would be looking to sell the home and take $250k (single) or $500k (married) capital gain tax free and roll it into some other income producing asset.

Depending on your current situation you may want the stability of paying down extra on your primary mortgage. However, that’s really a choice you will need to make based on your preferences / level of risk tolerance.

Since there is no standard correct answer, try to just focus on what you think will be best for you and your family. :)