Is it Time to Double Down on a Mortgage?

Dear Dr. Don,

It has been interesting to watch the improvement in the housing market. We recently refinanced the mortgage on our house with a 15-year loan at 2.75%. We want to move to a new place in the next couple of years. But now we're facing a bit of a dilemma. One wonders where interest rates will be when we're ready to move. Can we move without selling our home? Would all of that make good financial sense?

Thank you,

-Mira Maison

Dear Mira,

No one really knows where interest rates or even housing prices will be two to three years from now. But, the odds are that both mortgage interest rates and home prices will be higher. Mortgage rates have been on the rise this year.

Compare Mortgage Rates in Your Area

Ask yourself about specific goals involved with moving to a new home while keeping the current one. What's the driving force behind the move, and why do you want to keep the house?

The typical homeowner has most of their net worth invested in real estate. Doubling down on real estate by owning two homes may not make financial sense. You have to decide whether you want to take on that risk. What are the worst-case and best-case scenarios?

On the other hand, if you're looking to trade up, you could make an argument that there's no time like the present to do it. If it worked out that you could avoid several years' worth of home price appreciation on the larger house along with the expected increase in interest rates, that would be good for you.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

Ask the adviser

To ask a question of Dr. Don, go to the "Ask the Experts" page and select one of these topics: "Financing a home," "Saving & Investing" or "Money." Read more Dr. Don columns for additional personal finance advice.

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.