The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Tbill on October 28, 2015, 11:40:01 AM
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In February, my family and I moved to a new city, which entailed getting a new job and a new house. I put a lot of effort into getting a house which would reduce my commuting distance as much as possible. I bought a house for 151k with 5% down that was about 7 miles from work. Salary 80k
Turns out I really did not like the job for several reasons and I quit. I took a new job 4 months ago and I believe this job will last the long haul and I think I could spend several years here. (Salary 80k) The bad part is, I am now about 15 miles away from home, which with traffic is about 45 minutes or 1.5 hours per day in the car, and on top of that I have to go through 2 toll booths each way totaling about $6 in tolls per day. There are homes available about 4 miles away from my new job in the 150-175k price bracket.
I'm thinking if I can drop 11 miles and $6 of tolls per day off my commute it would be worth the move. It kinda sucks though because we have only been in the house we just bought for about 7 months. So I'm saving cash for a down payment, I dont have much right now, but I'm trying to decide between three scenarios:
Scenario #1
Save a 20% down payment, which would take me a year or more, I wouldn't have to pay pmi, but I would have to suffer the commute and tolls for a year.
Scenario #2
Save a 5% down payment, which I could do pretty quickly, getting out of the commute now, but I'll be paying pmi on the new house.
Scenario #3
I own 1 rental house that I bought about 4 years ago, I put 20% down and I think its been a great investment, it currently rents out at $1,250/month and principal+interest+taxes+insurance is about $620/mo. I owe about 68k on the place and its worth about 125k. The current tenant is moving out in 1 month, so I could put it up for sale, take that cash and put a good down payment on my new house, but I loose my investment.
Other info:
I dont really want to sell the rental property because I feel like its a win to have that investment, but I'm willing to part with it if it makes the most sense.
Age 33, married, two kids
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The rental is in another city, about a 3 hour drive away. I could refinance the rental, but I would pay about $2,000 in closing costs to get the equity out. That idea probably deserves some consideration, the fees are a turn off though.
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Option 4: Save the %5, buy the new house, save up more money and refinance without PMI asap.
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Option 4: Save the %5, buy the new house, save up more money and refinance without PMI asap.
Yeah. Option 4.