Author Topic: Housing Dilema  (Read 1086 times)

Mr. and Mrs B

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Housing Dilema
« on: June 25, 2018, 03:57:25 PM »
Hello Mustachians,

*we are very new to this idea of financial independence and we are currently just trying to clean up our situation in order to start saving as much as possible.

I'm looking for advice :)

My husband and I are considering selling.  It's a great time in our area to sell and we have some equity built up.  We also know we don't want to live here long.  We bought a house that we really didn't need.  We want to downsize and reduce our mortgage.

My husband commutes 40 minutes each way to work and we are trying to figure out how to reduce this.  Possible options: moving closer, seeing if employer will allow him to work remotely.  He's a software developer.

Also, we have 4 kids. 

The area my husband works in isn't extremely safe so we have concerns moving closer.  We live in the cheapest county that surrounds the city he works in.  The closer we move to his job, the more expensive housing gets.  We can't afford to buy in the city, especially in the area closest to his work.  We are able to find rentals we can afford but to buy those houses right now they are extremely high in price.  Going this route would save us the cost of his car but wouldn't reduce our mortgage/rent by much.  It really doesn't make sense to rent unless it's temporarily.  I should also add that this is where all our grocery stores are as well as some of the kids activities.

It would be nice to sell our home and either just invest in vanguard and buy a cheaper home or invest the money into that much cheaper home.  Selling would also allow us to knock out our equity line of credit.  We just can't decide if that seems stupid, selling a house just because it's the right time and we are really wanting to reduce our outgoing monies.  We just can't seem to nail down a plan that makes sense once we sell the house. 


*in short
If we moved closer we could sell a car, but our rent/mortgage would be about the same. 
If we sold and bought smaller using the money we get from the sell of our current home it would greatly reduce our mortgage, but wouldn't change the commute/extra car.   

I would love to hear your thoughts and ideas.

Thanks!
« Last Edit: June 25, 2018, 04:07:02 PM by Mr. and Mrs B »

red_pill

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Re: Housing Dilema
« Reply #1 on: June 25, 2018, 04:03:25 PM »
In your rental calculation, have you factored in the interest you will earn by investing the equity from your home sale? Have you factored in the reduction in home maintenance?

Sibley

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Re: Housing Dilema
« Reply #2 on: June 26, 2018, 10:55:06 AM »
Have you played around with the NYT Rent vs Buy calculator?

If you can drop a car, that would at least help mitigate the higher housing costs. Make sure to factor that in - car payments (if applicable), insurance, taxes, gas, maintenance, possibly parking, etc.

Run numbers both ways.