Hey everyone,
TL:DR: I am financially stable at the moment and I am looking at an affordable tiny-ish house (950sqft or so) to further financial independence. I'm needing extra opinions.
Long Story (I'll try to detail, without giving all my numbers away. :P) I've been reading MMM and similar blogs for years. I am absolutely onboard and fully-committed to frugality. I often feel like I have this down-pat, but I really want some extra opinions for this particular decision, because it's the biggest financial decision I may have ever made. Also, the "bubble-ish" economy that we're seeing now makes me extra-wary. I'm graduated, steadily employed, and debt-free. Currently, I'm dumping my money on rent and am a little bummed about that, but I'm pushing to lower my overhead with every life change or relocation. I have a shockingly reliable 7 year old car that's paid-off (I know... NEW, wasteful! :P. ) and plan to run it into the ground.
I have been watching a rumored tiny-house community in Charlotte, NC for a few months, but never imagined that it would come to fruition. Low and behold, it's here and it is a real possibility. (See home developer and info URL:
https://www.keyoparkwest.com ). I've always loved the idea of a small and affordable home that could be paid off in a snap, pushing me closer to financial independence, but am a little freaked out about the idea now that it is moving from a dream to a reality.
I could get 800 - 950 sqft, new, somewhat-custom home in a good area, for $130,000, all-in. After 20% down, the loan would *only* be $104k with 3.8% interest. I am not one to take debt lightly, so even such a relatively small mortgage is still giving me the chills... I could put more down, but I want to maintain an adequate safety-net and won't sacrifice that.
Doing the math and splitting this mortgage with my significant other (considering her payments as her "Rent"), it would be paid off in 4 years flat. She and I have a really strong relationship, but I always do all the math and prepare for the worst. So, should the S.O. not work out, I can pay it off in 8 or 9 years, myself (possibly sooner, depending on how hard I hustle, in true MMM fashion).
If/when the economy or job situation becomes uncertain, a 30-year fixed mortgage (as opposed to a 15-year) would leave my monthly mortgage under $600. While I will never willingly let a mortgage string out for 30-years, the flexibility and low-minimum make me feel better, should the worst-case economic situation come about.
If you've made it this far, thank you. The real question is... What would you do? With the assumption that I am pushing towards financial independence, but also would love a brand-new, custom small house, is this reasonable? Is it safe?
Thanks again for your time and opinions. I'm looking forward to what everyone has to say!