Author Topic: Advice for a new mustachian- to buy a house or continue renting?  (Read 1864 times)


  • 5 O'Clock Shadow
  • *
  • Posts: 40
I've spent some time recently perusing the internet looking for financial advice and this blog has been the most interesting and helpful resource so far! My husband and I already tend to be frugal people so this perspective is up our alley.  However there is room for improvement, and I present our situation to you for some advice on a few questions I'll ask below.

I am a recent graduate of physical therapy school, and did not have parental support so racked up about $112,000 in student loans at interest rates ranging from 6.3 to 8.3%! We recently moved from VT to OR to pursue residency program for myself, and are renting in Eugene OR as our house in VT is also being rented to reliable people. We recently refinanced our home in VT at 4% interest and received $48,000 cash-out that we put towards the highest interest student loans.  This is our current monthly financial break down of rent/loan fixed expenses:

House payment $1,589  (loan total $165,000 at 4% interest 15 year mortgage)
Rent in Oregon: $1,200 (which is cancelled out by the $1,200 we receive in rent for our VT house)
Student loan payment:$910  ($67,136 at 5.8-6.5% interest rates, 10 year payment plan)

I'm still in the process of figuring our our fixed monthly expenses, but I estimate we realistically spent about $4,500 a month.
Our monthly income is $6,000 a month take home pay.

One additional expense has been continuing education for my residency program, which has been an average of $1,000 a month, which I will soon stop paying.

We have about $7,000 in our savings account.

My main question is this: We currently rent, which is basically throwing money down the drain.  We are here on a semi-permanent basis (at least 2 more years, maybe more but maybe not) Should we take our money in our savings account, use it for a down payment on a small, affordable house (no more than 150,000 with a monthly payment of less than $1,000)? Is it worth the risk of moving and having to rent and/or sell in a few years?

Or should we just move to a more affordable rental house? I think we could save $300/month on rent. I've estimated every $100 additional I put into my loans a month saves 1 year of paying back. We could also put part of our savings into my student loans right now, if we did not need it for a down payment.

I hesitate to buy because we are hoping to have a baby soon and may need that money for maternity leave time.  However, if we end up saving a few hundred a month (plus the extra $1,000 non budgeted monthly income) we could beef our savings up quickly.

It comes down to just focus on paying off the student loans or build equity in a 2nd home while paying off loans slower?


  • 5 O'Clock Shadow
  • *
  • Posts: 20
Re: Advice for a new mustachian- to buy a house or continue renting?
« Reply #1 on: September 29, 2013, 06:37:43 PM »
I think this should all come back to what your goals are.  Given you aren't sure how long you are going to stay in OR (or whether a house you bought now would fit with your long-term plans to have a family) I wouldn't buy a second house, and would focus on paying off the student loans as quickly as possible.

In terms of your overall expenses, you say the $1200 per month you receive in rent cancels out the rent you pay so I'm not sure if these amounts are both reflected in your income and expenses.  If they are, your other expenses look pretty good (at around $800 per month).  If not, then your other expenses are running at around $2000 a month which should provide a lot of opportunity for extra savings.  It may be worth posting your budget to get some comments on where you may be able to save.

You also don't mention what your long term plans are for your house in VT.  You are losing money every month on this, so if you don't plan to return to VT, and if you aren't underwater on your mortgage, then it may be worth considering selling it to free up some cash each month and increase your savings.


  • Bristles
  • ***
  • Posts: 291
  • Location: Earth
Re: Advice for a new mustachian- to buy a house or continue renting?
« Reply #2 on: September 29, 2013, 06:57:15 PM »
I would vote against buying a house in Eugene if you are only staying there 2-3 years. Cost of closing and moving aren't worth it for that short of a term.

I lived in Eugene for almost six years. It's a great town in many respects, but not for careers. If you think you'll be there at least five years with stable employment, it's worth buying. Oregon real estate is inflated and overly competitive in Portland and Eugene, so it's also not easy to find good deals on property. There are a lot of $hitholes out there for 300k.