Tweet
I will try to be as concise as possible, our goal is to live on a lake. We have a beautiful house right now and will not make this move until the time is right and the property is right. The time could be right in 6 months or 10 years and we are okay with that. We have narrowed our search to one part of one lake. The one part of the lake is based on school district, repeatedly and historically one of the best public school systems in our state.
Houses in this area used to be cottages and now range from about $1-5M. A couple houses burned down and the very ideal lots sold for a little over 800k. There will be basically three options:
1. buy a house that is move in ready and keep as is or slightly renovate
2. buy a house and do a major renovation at time of purchase or down the line
3. tear down and start from scratch
I am guessing we would likely fall into option 2 or 3 since a lot of the houses are very old and small and would not suit us. Many of the new houses are massive and much bigger and more opulent than we would want. We are looking to have a very simple house with nice finishes, nothing crazy. We will not be spending big money on bars and wine cellars and a lot of the other things you see in expensive houses. We are thinking approx 4000 square feet. I think to get what we want we are looking at $1.5-2M. We are pretty set on not going beyond 2x gross income for our mortgage. We have three little kids.
Finances:
We made a little over 600k in 2016, this will be a little higher this year and will likely trend up to about 750k in the next couple of years and could be more after we finish paying the buyouts of two recently retired partners. We will not be using the possibility of my income increasing in the decision making process. Most of this income is mine, my wife works casually and makes about $40/hr working about 12-16 hours a week.
Student loans will be paid off in about 18 months, likely January of 2019, due to large year end bonus. At that point we will only have our mortgage which is currently about 350K (house value around 475k).
We max out 401k, backdoor roth, HSA. The rest of the excess goes towards student loans (wifes undergrad is paid off (150k), wifes grad school, dental school). We have about 250k in 401k, roth, HSA and like to keep about 50k in cash. The value of my partnership is about 750k and share of our building is 200k.
Questions:
1. I am most comfortable paying off student loans, saving for 20% down payment, then buying. This will likely take about 4 years. I only have 2 people outside of my wife who I would consult with on this. They have posed the idea of slowing down on student loans and having a down payment ready for when the right place comes on, since we are looking at such a small area (12 houses have been listed in the last 4 years). As I explained my comfort zone, they argued you may be delaying paying student loans off for a couple years but you are making a "forever" decision to get into the home you want and also used the current low interest rates as an incentive to move faster. Thoughts on this?
2. I do not get real excited about physician mortgages. I feel like if we cannot afford to do it the conventional way, then we should wait. Any reasons why my thinking would be short-sided? My wife hates thinking about money and says if it stresses me out she does not want to do it. I brought up a physician mortgage to her and we are on the same page.
3. We built our current house and loved doing it. we are looking forward to that process of building or renovating. We have some general meetings lined up to get a better idea of what that process looks like so we have a better understanding when the time comes. We are also talking to people we know on the lake to learn more about things we may not realize, unforeseen expenses, etc. Does anyone have experience with a major renovation or lake living? If so, what thing should we be learning more about that we may not think of?
4. I need to put pen to paper and run more numbers for my wife and I to go over. We know this will be a sacrifice financially, but need to get into more details about how much of a sacrifice it will be. How much longer will we (mostly I) need to work? Is that worth it? This is the gut check section where I am really interested to hear your thoughts. Is this nuts? Are we crazy? etc. We really are open and want to make sound financial decisions as we pursue this.
I am sure I am forgetting a lot, and will have more questions. Thanks for any input, advice, criticism.
Houses in this area used to be cottages and now range from about $1-5M. A couple houses burned down and the very ideal lots sold for a little over 800k. There will be basically three options:
1. buy a house that is move in ready and keep as is or slightly renovate
2. buy a house and do a major renovation at time of purchase or down the line
3. tear down and start from scratch
I am guessing we would likely fall into option 2 or 3 since a lot of the houses are very old and small and would not suit us. Many of the new houses are massive and much bigger and more opulent than we would want. We are looking to have a very simple house with nice finishes, nothing crazy. We will not be spending big money on bars and wine cellars and a lot of the other things you see in expensive houses. We are thinking approx 4000 square feet. I think to get what we want we are looking at $1.5-2M. We are pretty set on not going beyond 2x gross income for our mortgage. We have three little kids.
Finances:
We made a little over 600k in 2016, this will be a little higher this year and will likely trend up to about 750k in the next couple of years and could be more after we finish paying the buyouts of two recently retired partners. We will not be using the possibility of my income increasing in the decision making process. Most of this income is mine, my wife works casually and makes about $40/hr working about 12-16 hours a week.
Student loans will be paid off in about 18 months, likely January of 2019, due to large year end bonus. At that point we will only have our mortgage which is currently about 350K (house value around 475k).
We max out 401k, backdoor roth, HSA. The rest of the excess goes towards student loans (wifes undergrad is paid off (150k), wifes grad school, dental school). We have about 250k in 401k, roth, HSA and like to keep about 50k in cash. The value of my partnership is about 750k and share of our building is 200k.
Questions:
1. I am most comfortable paying off student loans, saving for 20% down payment, then buying. This will likely take about 4 years. I only have 2 people outside of my wife who I would consult with on this. They have posed the idea of slowing down on student loans and having a down payment ready for when the right place comes on, since we are looking at such a small area (12 houses have been listed in the last 4 years). As I explained my comfort zone, they argued you may be delaying paying student loans off for a couple years but you are making a "forever" decision to get into the home you want and also used the current low interest rates as an incentive to move faster. Thoughts on this?
2. I do not get real excited about physician mortgages. I feel like if we cannot afford to do it the conventional way, then we should wait. Any reasons why my thinking would be short-sided? My wife hates thinking about money and says if it stresses me out she does not want to do it. I brought up a physician mortgage to her and we are on the same page.
3. We built our current house and loved doing it. we are looking forward to that process of building or renovating. We have some general meetings lined up to get a better idea of what that process looks like so we have a better understanding when the time comes. We are also talking to people we know on the lake to learn more about things we may not realize, unforeseen expenses, etc. Does anyone have experience with a major renovation or lake living? If so, what thing should we be learning more about that we may not think of?
4. I need to put pen to paper and run more numbers for my wife and I to go over. We know this will be a sacrifice financially, but need to get into more details about how much of a sacrifice it will be. How much longer will we (mostly I) need to work? Is that worth it? This is the gut check section where I am really interested to hear your thoughts. Is this nuts? Are we crazy? etc. We really are open and want to make sound financial decisions as we pursue this.
I am sure I am forgetting a lot, and will have more questions. Thanks for any input, advice, criticism.
Comment