BoilerEngr
Confused about dryer sheets
Warning - This is kind of a long post, but I want to layout the details as best I can, so anyone who is interested can give an insightful response.
Ok, so I have reviewed this scenario with my family and a trusted friend, but I wanted to see what sort of feedback I would get here. Here is some background on my situation and a summary of the decision I am facing. I would really appreciate any insight:
Wife and I are 31, no kids. We have been contributing fully to our 401ks for the last 8 years. We paid off our first house about 2 years ago and have really enjoyed the security of living mortgage free. It's a small 2-bedroom house, but in a nice neighborhood and overall a great place to live. However, we are thinking about having kids and will certainly need a bigger boat if we do. I work at home and use our 2nd bedroom as an office, so we really have no extra room.
We want to stay in the same area, but the larger houses in the neighborhood cost more than double what ours is worth. Since this is anonymous (somewhat), I will throw out some ballpark numbers. Our house is worth around $150k and owned free and clear. We have a found a couple of perfect houses in the $350 to 420k range, but have not put ours up for sale yet. We have about $80k in cash savings that we could use for a down payment (prefer to put at min 20% down so we can get a traditional loan with no PMI), so wouldn't need to sell our house first before buying the new one.
So, I'm thinking we can swing the move, even if we have to sit on our current house for a while as it sells. What I am really scared of is cleaning out our savings and going into mortgage debt again. We would really be walking the line, as far as emergency funds for a year or so, or until our current house sells. I am not very confident in the economy over the next year, so I'm not sure this is a smart move. As we are now, we could both lose our jobs and be fine for quite a while since we have no debt, low expenses and plenty of cash saved. Taking a $300k mortgage loan and cleaning out our savings would obviously change that picture.
I have thought it through a million times, but just looking for an outside perspective on the scenario, from anyone who may have faced a similar choice.
Ok, so I have reviewed this scenario with my family and a trusted friend, but I wanted to see what sort of feedback I would get here. Here is some background on my situation and a summary of the decision I am facing. I would really appreciate any insight:
Wife and I are 31, no kids. We have been contributing fully to our 401ks for the last 8 years. We paid off our first house about 2 years ago and have really enjoyed the security of living mortgage free. It's a small 2-bedroom house, but in a nice neighborhood and overall a great place to live. However, we are thinking about having kids and will certainly need a bigger boat if we do. I work at home and use our 2nd bedroom as an office, so we really have no extra room.
We want to stay in the same area, but the larger houses in the neighborhood cost more than double what ours is worth. Since this is anonymous (somewhat), I will throw out some ballpark numbers. Our house is worth around $150k and owned free and clear. We have a found a couple of perfect houses in the $350 to 420k range, but have not put ours up for sale yet. We have about $80k in cash savings that we could use for a down payment (prefer to put at min 20% down so we can get a traditional loan with no PMI), so wouldn't need to sell our house first before buying the new one.
So, I'm thinking we can swing the move, even if we have to sit on our current house for a while as it sells. What I am really scared of is cleaning out our savings and going into mortgage debt again. We would really be walking the line, as far as emergency funds for a year or so, or until our current house sells. I am not very confident in the economy over the next year, so I'm not sure this is a smart move. As we are now, we could both lose our jobs and be fine for quite a while since we have no debt, low expenses and plenty of cash saved. Taking a $300k mortgage loan and cleaning out our savings would obviously change that picture.
I have thought it through a million times, but just looking for an outside perspective on the scenario, from anyone who may have faced a similar choice.