My wife and I currently live in a home that we bought 3.5 year ago for $347k with a 3.75% interest rate. We have outgrown the home and would need to do about $40k in renovations (additional bedroom and bathroom in basement, fence for yard because of little ones) in order to stay in the home longer term.
However, we recently came across a home that checks almost every box for us and would be a long term home- maybe even a “forever” home. Great public schools, awesome neighborhood, perfect layout for family and guests, big yard. The house definitely could use some updates over time but nothing we need to do right away- very easy to move right in. The neighborhood is very up and coming and seems to hold its value well.
The issue is we are going about 40-50K over our budget. Our monthly budget will be a little stressful for a while, but our jobs (dentist and tech sales) are steady and our incomes are increasing as we get more experience. In order to get 20% down and not pay PMI, we will need to take around 20K from our Roth IRA (without penalty). The other issue is the best loan interest rate we can get right now is 4.35%. We’ve heard this number will only be going up. To us, it seems more prudent to take this risk now while interest rates are still close to what we got 3 years ago, and buy this house that we could stay in for 30 years. It feels like a good risk. It also seems most wise to take money out of our savings to put the 20% down as opposed to paying PMI and getting a higher interest rate.
Are we thinking right here or do we suck it up and stay in our starter home, & save more money? We’ve been looking & this really is the best deal we’ve seen that would make us want to move from our current home.
Submitted February 16, 2019 at 03:06PM by wgsharpe1128 http://bit.ly/2SBRMCt
