All,
Need some advice... I think I have a runway of about 12 months before baby talk gets serious.
Age: Both 26 by end of 2015. Currently 26 me and 25 her.
Salary: $116K Dual Income ($70k me/$46k her)
Tax Brackets: 25%, 0% state TX
Retirement Accounts: $100k in Vanguard Lazy 3 fund (Bene IRA)
$1.2k in new 401K (just started job 5 months ago)
Recently paid off $16K debt, raised contributions from 6% to 15%, company match 3%
I take my RMD and roll it into a tIRA. Well, I "take my income" and roll it into my tIRA
Side income/ Tax refund:
I played around with Taxcaster, I see that we should have somewhere between a $7k or greater tax refund.
I also have $7k-$10k cash coming from side income at the end of the year.
Along with, assets I am liquidating now that could provided $5-$10k cash.
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Debts:
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Loan Amount Rate
Student Loan 1 $27,505.30 6.80%
Student Loan 2 $9,204.32 5.16%
Student Loan 3 $23,353.28 ~4%
Student Loan 4 $5,465.58 ~3%
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Mortgage:
Bought Sept 5th, 2014 @ $331K.
Orig Loan:$313,785.00 @ 30 y fixed 4.125%
Current: $308,629.62
PMI: $162/mo :( Face punch
Mortgage Payment (including PMI, Home Owners Ins) = $1,810.34
Property Tax: $9,000 a year :( In a stupid MUD Tax area, adds 1% to my tax bill.
Total Mortgage Payment: ~$2,550.
Current Home value (today, take a while to sell): $360K
Expected Home value (optimistic, 4%-11% appreciation YoY): $375K-$400K
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When the baby comes, the wife is going to stay at home. We will lose the $47k a year. However, we have 12-24 months of dual income, and we can pound away at either: Student Loans or Principal. The Mortgage Payment is unacheiveable going down to one income @ $2,550.
Assuming $375k sale and $350K net:
Option 1: Beat the shit out of Student loans, sell the house and have equity of around $50k to put down on a house.
Option 2: Beat the shit out of Mortgage Principal, sell the house and have equity of around $75-$100k to put down on a house.
My ultimate goal: Allow my wife to stop working to raise our child(ren).
Thoughts: I think Option 2 is looking like a better, but not financially as smart idea because if I have $100K to put down on a say $325K house, I will have a $225k mortgage over 30 years. The key here is the new house we are looking at will have a property tax payment of close to $6K, instead of $9k
Thoughts MMM?