Should I sell or rent?

[Francisco B.]

Hello all. I want to start off by thanking the creators and users of this site for providing a place where people can learn and share their real life experiences with each other.

Question for you guys. We bought a fixer upper 3br 1b home in Bergen County NJ in 2007 for 220k. We put about 50k into it and paid it off in 2012. We are now in contract to buy a new construction three family house in NY about 30 minutes away from our current home.

We applied for a down payment assistance program for 30k and got a conditional approval. In order to qualify we would have to

1. sell our current home.

2. Use one of their preferred lenders for our mortgage.

3. Take a home buyer and landlord classes for a total of $300 - $500.

4. The new house would have to be owner occupied.

5. After living in it for 5 years the 30k loan is forgiven.

We have a heloc and our own funds to use for the downpayment and closing if we decide to go with out the program. Unfortunately our current house might only fetch between 225k and 269k. The price of the new house is 680k. The rents in the area are $1800 - $2000 a month.

We were approved by a non-preferred lender who would allow us to rent our current home for $1800 - $2000 and move into the new house but we wouldn't qualify for the 30k grant.

Our question to you guys is, should we sell our current home and use the funds for the new house or rent it out to help pay off the portion of the heloc used and eventually the new house.

Numbers on our current home

No mortgage

Taxes $5300 a year

Insurance $600 a year

Water $360 a year.

Utilities $150 - 350 a month

New house

Three family new construction

Price $680k

Taxes approximately 6k

Two rental units at $1800 - $2000 a month.

Hopefully i have included enough info. Please let me know if i left anything out. Thanks in advance for you help.

Cisco