Hello Mustachians,
My wife and I are considering buying our first house and could use some advice. First, let me explain our long-term plan to give you some context.
My wife is Brazilian, I am American and we are here living in the US. We are here building our stash with the eventual goal of retiring early in Brazil. I estimate it will take us 7 to 8 years for us to reach FI. So obviously any house we buy now we would want to be able to sell easily once FI is reached. The average rent for a house in the area within biking distance of my job is about $1400, and there are a handful of older, partially refurbished properties in the area for sale in the $185k range (which I think we would shoot for) but the majority of properties in the area sell for around $250k.
My question is about mortgages. We can put down 20% for a $185k property no problem. Based on a tip from another mustachian we are going to use capcenter.com to avoid closing costs. With 20% down on a $185k property we could get a rate of about 4% for a 30 year mortgage, or about $3.25 with a 10 year. 30 year monthly mortgage payment would be about $702, while for 10 year it would be about $1,033. My inclination would be to go for the 30 year so that we have a lower monthly payment and can throw more money into Vanguard each month. This should in theory result in a better return for us when we go to sell the house in 7 - 8 years once FI is reached, right? Or is it a better idea to paying off our mortgage debt as quickly as possible? Hopefully the housing market doesn't tank in that time and we can sell the house and make a small gain after paying off the lender. But I know that housing is generally a poor investment. I've never bought (or owned) a house before so I would appreciate any advice/input. Feel free to ask any questions if I left out any crucial information. Thanks in advance!