Newbie Needs Advice

Hi All! I’m new!

My wife and I got married 5 years ago this Friday, and we settled on our house the day before the wedding (stressful.)

We purchased an older home (built in the 40’s) It is really small but very structurally sound.
• 2 Bedroom (One very large, one pretty small)
• 1 full Bath (I fully renovated it 5 years ago)
• 2 living/family rooms (new dry wall in one, new paint in the other)
• 1 very outdated, pretty small kitchen
• Large screened in Porch
• Large Detached Garage
• Nice 0.37 acre lot
• Stream in Back Yard

We originally purchased the house for $89k
We refinanced about 1.5 years ago and consolidated some debt for $116k
The home is now worth somewhere between $160-180k
At the time we knew we didn’t want to live here much longer so we took an Interest Only Loan out for $650 a month for 3 years

We are a young Couple (27 years old, we were 22 when we purchased the house) and we are at a point where we need to make a big decision.
A) Sell the house buy bigger better house
Get a big loan and build a second Story to make the house bigger better
C) Refinance the house and pull out enough equity for a down payment on our new house, and rent the old house.

The thing that is VERY hard to describe is the Housing Market where we are at… We live in Cecil County Maryland 21918, but we are REALLY REALLY Close to Harford County Maryland, We wanted to live in Harford County (Still Do) but we couldn’t afford the homes in Harford County, so we bought the house in Cecil County. Harford County Was really Booming, but I think it’s dying down now. But I’m still tempted to purchase another home in Cecil County, because I know it has much more room to grow than Harford. (Much more rural, schools not overrun) (No more homes can be built in Harford County because the schools can’t accept more students)

So I know keeping the house and renting it out would be best in the long run, building extra equity and increasing assets, but is it possible?

Can I purchase a new $200k home to live in (80/10/10 30yr mortgage)
Pull $20k for a down payment from refinancing the old home for $136k
And rent the old home for a small Profit?

Advice, suggestions, questions??? All welcome! Thank You!

Patrick
[email protected]