Hi All,
Spouse and I are currently in our early 30s with a toddler and new baby in the way. We are running out of space in our current home and have our eye on another. It is more home than we need right now (or ever) at 4500 sq ft, but we would eventually grow into it in the coming years as we hope to have 3-4 kids total. Real estate is booming in the area, and this house is near the city center where we want to live and raise our family. We currently live a mile or so away and would likely rent our current home as it is appreciating in value considerably. Great schools and lots of revitalization going on. My job is 100% secure barring catastrophe. Wherever we move next, we will undoubtedly stay until retirement (again barring catastrophe for which I've maxed out disability insurance and have a few term life insurance policies to cover such an event).
Income: $600k
Debt: Business loan $10k/month for 3.5 more years. Cars are paid off.
Savings: $100k
Investments: $80k in mutual funds that we would likely use as down payment
Retirement: Both maxing 401k. Also just started investing 20% of income now that student loans are gone.
I recently aggressively paid off student loans so don't have cash for 20% down while keeping emergency fund, which I would obviously prefer. My primary reason for wanting this house is that its size and location is exceedingly rare and we want to stay in this area long term.
The home is valued at and will probably sell for $900-950,000 and with 10% down the mortgage would be ~$850,000 at 4.35-4.5% based on the proposal from my lender. Taxes and insurance would be ~$800/month. The home is also older/historic and utility/maintenance costs will be greater than average. The kitchen is fully functional but could use a facelift. Otherwise it is move-in ready and in good condition.
I've done the math and from a cash flow perspective, we could afford it and maintain our lifestyle (we’re both pretty conservative/frugal...this home would be our “splurge”) while still saving 20% of our income. Once the business loan is paid off, we will certainly be more comfortable. My biggest concern is the opportunity cost of putting $$ towards the home with the increased mortgage versus investing that money over the next few years. I don’t want the home to be a financial albatross, but am worried that if we miss on this one then in a few years there may not be another like it that checks all of our boxes. We are only somewhat emotionally invested
" /> It would also be nice to lock in a mortgage with a relatively low interest rate for the long haul, but appreciate that we will be paying for that in the short term.
Many thanks in advance for any and all wisdom/opinions.
Spouse and I are currently in our early 30s with a toddler and new baby in the way. We are running out of space in our current home and have our eye on another. It is more home than we need right now (or ever) at 4500 sq ft, but we would eventually grow into it in the coming years as we hope to have 3-4 kids total. Real estate is booming in the area, and this house is near the city center where we want to live and raise our family. We currently live a mile or so away and would likely rent our current home as it is appreciating in value considerably. Great schools and lots of revitalization going on. My job is 100% secure barring catastrophe. Wherever we move next, we will undoubtedly stay until retirement (again barring catastrophe for which I've maxed out disability insurance and have a few term life insurance policies to cover such an event).
Income: $600k
Debt: Business loan $10k/month for 3.5 more years. Cars are paid off.
Savings: $100k
Investments: $80k in mutual funds that we would likely use as down payment
Retirement: Both maxing 401k. Also just started investing 20% of income now that student loans are gone.
I recently aggressively paid off student loans so don't have cash for 20% down while keeping emergency fund, which I would obviously prefer. My primary reason for wanting this house is that its size and location is exceedingly rare and we want to stay in this area long term.
The home is valued at and will probably sell for $900-950,000 and with 10% down the mortgage would be ~$850,000 at 4.35-4.5% based on the proposal from my lender. Taxes and insurance would be ~$800/month. The home is also older/historic and utility/maintenance costs will be greater than average. The kitchen is fully functional but could use a facelift. Otherwise it is move-in ready and in good condition.
I've done the math and from a cash flow perspective, we could afford it and maintain our lifestyle (we’re both pretty conservative/frugal...this home would be our “splurge”) while still saving 20% of our income. Once the business loan is paid off, we will certainly be more comfortable. My biggest concern is the opportunity cost of putting $$ towards the home with the increased mortgage versus investing that money over the next few years. I don’t want the home to be a financial albatross, but am worried that if we miss on this one then in a few years there may not be another like it that checks all of our boxes. We are only somewhat emotionally invested

Many thanks in advance for any and all wisdom/opinions.
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