Author Topic: Should we move closer to work or become FI more quickly?  (Read 2842 times)

MichelleD1977

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Should we move closer to work or become FI more quickly?
« on: April 10, 2016, 06:10:12 PM »
Hello all,
here is our situation, which I am seeking advice on.  I know ultimately it's a personal decision, but looking for thoughts, especially from the financial point of view.

We are 2 middle aged adults (38, 45) currently living in a rural town of Underhill Vt. There is not much community here, or ammenities, but surrounded by beautiful areas and recreation.  This is basically a bedroom community for Burlington, VT. It takes about 35-40 minutes to reach Burlington. My husband has a 30 minute commute to work, mine is 40, 45 in case of snow or excessive traffic. My husband has owned this house for 18 years, and our house is very affordable. We also love our house, but recently I have become frustrated by the commute (of course, no brainer) and also the lack of options for socializing and community in our area.  We have discussed options, and have come up with a compromise of moving to the small town of Richmond, VT, which is closer to both of our jobs and will cut our commute by 50% each. It also has nice options for recreation, and a more centralized community, so I would be happier with that. We'd also have the option of biking to work (him more than me, but I could swing it occasionally) as we are both big time cyclists.  I currently commute 3 days a week, and work 2 days closer to our house. He commutes 5 days/week.

The dilemma- housing prices are more expensive AND more scarce. I've done a little research and see that the market seems very competitive, especially in our price range of 200,000-250,000. Which brings me to the meat of the dilemma:

We currently owe $142,000 on our mortgage, and were considering refinancing for a 2.875% rate for 15 years. We have about $160,000 in stocks, and I have about $16,000 in debt. Our monthly budget, after refinancing, would be roughly-

$1250 mortgage
$3000/month: investments
$1500-everything else

My long term financial plan is to slowly reduce the hours I work, to have more time to play and enjoy life.  I've decided once we have $350,000 in investments, we could slowly let that accumulate over 10 years and add to it at our leisure, as we work less (say 25 hours/week) and enjoy a partial retirement, fully retired by 55.  If we buy a more expensive house, we could put this plan in jeopardy. 

Ultimately, my question would be- how much more would you pay to move?  We could sell our house for $200,000-$210,000, but might end up buying a house costing $250,000. 

The town of Richmond is very cute, and a desirable place to live. I'm sure real estate values will appreciate well there, which could help.  If we did sell eventually, I'm sure we will recoup the money we put in.  But it doesn't change that we will be paying more in the meantime.

tobitonic

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Re: Should we move closer to work or become FI more quickly?
« Reply #1 on: April 10, 2016, 06:23:57 PM »
Personally, I wouldn't go to the trouble of moving house to turn a 30/45 minute commute into a 15/23 minute one.

To me, the FI / commute isn't the real issue here, but the question of where you want your forever home / community to be.

If that's Richmond, then the move is a no-brainer. But if it isn't...then I wouldn't consider uprooting myself, regardless of FI, commuting, etc.
« Last Edit: April 10, 2016, 06:26:34 PM by tobitonic »

Old Man Mase

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Re: Should we move closer to work or become FI more quickly?
« Reply #2 on: April 11, 2016, 05:19:46 PM »
It sounds like you guys both have a good plan and that things will work well whether you move or not.

Some other things that might be good to consider:
What are the savings of gas, wear and tear on your vehicles (and not just time) if you did move closer?  What is the financial benefit after living in Richmond after 1 year?  5 years?  Are the tax rates significantly different?  What about your life would probably change financially, other than the cost of buying and maintaining a more expensive property?

But yeah, I agree with what tobitonic said too.  If you know your quality of life will be better by moving, than maybe calculate the months/years it will set you all back in your plan.  Then you can look at that number and see if it's worth it.

Mother Fussbudget

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Re: Should we move closer to work or become FI more quickly?
« Reply #3 on: April 11, 2016, 05:55:27 PM »
How much monthly rent could you get for your current home?  Have you considered renting within walking / biking distance to your jobs?

MichelleD1977

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Re: Should we move closer to work or become FI more quickly?
« Reply #4 on: April 11, 2016, 06:38:55 PM »
We could rent a crappy 1 bedroom apartment for the rent we'd get for our house.  The housing market is significantly more expensive, especially within walking distance from my job, which is in a trendy up and coming neighborhood.  Then we'd still not meet my husband's demands of being able to be close to nature, and relatively in the country.


FrugalFan

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Re: Should we move closer to work or become FI more quickly?
« Reply #5 on: April 11, 2016, 06:50:38 PM »
A 50k increase on the mortgage is not a huge deal at today's interest rates. If you plan on downshifting anyway, would Richmond be a better place to enjoy some of your play time? If so, it might be worth it. It's important to look at the entire picture, not just the financials.

MichelleD1977

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Re: Should we move closer to work or become FI more quickly?
« Reply #6 on: April 11, 2016, 07:56:07 PM »
Yeah, I just ran the numbers, and we could probably swing a 50,000 increase in mortgage and still have our 15 year mortgage, maybe pay an additional $150/month.  It would be a very balanced place to live.  2.75% interest rate is way too good to pass up! We're going to meet with a realtor next week!

dess1313

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Re: Should we move closer to work or become FI more quickly?
« Reply #7 on: April 11, 2016, 09:05:11 PM »
you should look at where you want to live long term.  if the new town would suit you better, then it would improve your life in ways not just about work and may be worth it to move.  big thing to consider is property tax implications of the new area, would it be drastically higher?

I am curious why you would have a 16k debt right now.  are things tight, is it a car loan, or is it student loans?

MichelleD1977

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Re: Should we move closer to work or become FI more quickly?
« Reply #8 on: April 12, 2016, 04:56:07 AM »
Student loans. The tail end of my $116,000 debt it cost me to become a physical therapist. We should be paid off in 6 months!