Should I sell or keep my house?

[Daphne V.]

We are going to move in near future to another state. The house we currently have purchased with low interest rate and already increased in value. We don’t want to rent in new location for a long time after we move. So should we sell and buy a new house or keep and buy? If we decide to keep , What do we need to do to get the second house approved by the bank?

[Scott Trench]

I generally have a heavy bias towards selling a primary residence. The reason for this is that you can exclude much of the capital gains from the sale of a primary residence. This tax benefit goes away if you keep it as a rental for a few years. 

To get a new home, you can likely get a 3.5% or 5% down loan approval. It's possible that you can buy a true rental property in your new state, AND use a low down payment loan to buy your primary residence.