Hi all, newish to the site. I'll try to keep it short.
Background: My wife and I are selling our house to relocate for a job. We were about to buy another giant stupid house and found you guys in the nick of time. We're all in on this new lifestyle and looking to make the best use of our situation (relocation paying closing costs both ways and moving our stuff) .
Background Data:
- 31 & 32 years old
- Earnings: $153k/yr gross combined
- We'll have $70k cash after selling our other house.
- No consumer debt (Credit Cards)
- $48k debt in (2) car loans at around 3% interest, keeping both cars for the time being.
- Buying a house around $120k at around 4% interest
- ~$100k in retirement accounts
Question: Should we put as much money as possible down on the house to minimize our mortgage, and have more cash-flow for the car debts? Or should we pay off the auto loans and only put down the minimum on the house to avoid PMI? This seems more complicated than simply seeing the slight difference in interest rates.
We plan to live in this little house for 2 years while we sell off all the stuff from our 4k sq ft house that we don't need. Pay off the cars and house in as few years as possible (2-3?) then look for a nice piece of land and eventually build a small house (dome, prefab, etc) and keep the current paid off small house as a rental. We don't want to be in a neighborhood long term but it makes sense for the moment.
Thanks for any help. Wealthfront says we're 30% to retirement now, but our savings rate last year was less than 8%...hope to stop being dumb and join you all in the future.