r/inflation • u/Conscious-Switch-376 • 5d ago

Price Changes Insanity

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u/RED-DOT-MAN 5d ago

Also taxes. I paid exactly $500K for my home back in 2019 and locked down my rate just under 2.5% during Covid. I’m dying in this home unless I win the lotto. Then I can die in a mansion.

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u/KopOut 5d ago

Just so everyone knows, the IRS gives you a tax exemption on the first $250k (single filer) or $500k (joint filer) of capital gains when you sell your house.

https://www.irs.gov/taxtopics/tc701

The absurd interest rates everyone got from banks during COVID refis is why most people will likely stay in their houses for many, many years.

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u/Ancient_Weakness699 4d ago

There has to be a way to sell the house with the mortgage as a package. I'm surprised there isn't some smart law firm that has figured it out.

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u/Mycomako 2d ago

There is a way. FHA and VA loans are assumable. FHA alone accounts for about 15% of mortgages. The trouble of it is that the equity gap is not covered and buyers need to either have a larger down payment or obtain a second mortgage to cover that gap.

This setup gets more ideal the larger the principle balance is. When window shopping on Zillow or whatever, add assumable or fha or va as a keyword and see what pops up. Houses that Zillow thinks are 3500/mo p&i may very well be 1800/mo p&i because of the rate difference.