Disclaimer: I have a newborn and I'm sleep deprived. I wrote this up at 3 in the morning so if it's all over the place I apologize.
Hey Everyone,
So for the last 4 months my Wife and I have been prepping to take a huge leap/risk by selling our house and moving into the in laws house for a couple years to save and purchase our dream home. I'd like to hear your thoughts and listen to your pointers on our plan as were kinda playing it by ear as of right now.
Let's start with more backstory because the situation I said above is too vague and sounds terrible. Recently my wifes Grandfather passed away (naturally, we were ready) and left behind his wife of 50+ years. He left her with everything she needs to live the rest of her life very comfortably. She has the house they lived in together for the last 20+ years completely paid off, but shes very lonely. So my wifes parents opted into moving in with her to help out and plan to sell their house down the road.
My in-laws came to us with a proposal that we brushed off before we really sat down and did all the math. They asked us since we were expecting a new child at the time if wed like to sell our current house and move into their house since its larger than the house we own, it's much much closer to family so that wed have help with the baby, nobody lives there so it would be ours to do as we please and lastly they would charge us a flat rent fee that includes gas, electric, water sewer garbage, their gardener and pool guy and I think that's it. This was all offered to us for $1300 a month.
We sat down and did the math, our mortgage was $1700, gas and electric was roughly $200 a month. Water was $50 a month and garbage was $150 bi-monthly. We also had an hour commute to work every day so gas was a huge bill for us. Roughly $500-$600 a month. So adding everything up that's about $2500-$2600 a month.
When we did that math and saw the $1300 a month savings alone we started actually playing with the idea of selling our house to jump start the process of buying what my wife and I call our "30 year home" pretty much our dream home. which we originally planned on staying in this house for 5-10 years. We live in California so the market is hot right now. But the size of the house we want is out of our price range After a bunch of talking we decided to commit to it and see where it takes us. Our thought process was that, yes it was a huge risk but we took a big risk on our first house and doubled the equity on it (bought in a buyer's market and sold in a sellers market). We understand that we were kind of lucky with how everything planned out with our first house. We contacted a reputible realtor out where we lived and she showed us all the comps of the area and we came to an agreement to sell the house for $315k and then we started the moving process right away. We moved about 6 weeks ago (2 weeks before the baby was born) and we were delayed on getting the ball rolling with putting it on the market. As of now the house is in a 14 day Escrow for the selling price of 320k cash. So a little bonus. We lucked out because the paradise fire was near us and the victims of the fire are starting to get insurance money.
After all is said and done. We will be walking away with our original down payment of 75k plus 1700. So roughly 77k which is just fine. Were also passed the 2 year threshold of capital gaines taxes which was good too.
Now here is where I need your guys input and thoughts. We have been debating on how to invest this money until we need it. We have a few ideas but were not sure how to proceed. Wed like to maximize our savings by paying a couple things off to increase the input.
First, we were thinking of paying off 1 of our 2 cars. We have one that we owe 7k on. And another 15k. We were thinking of finishing out the 7k car which would free up around 300 a month.
Second, credit cards. We have a few credit cards between us with a total balance of 2k-ish. I was thinking of paying them all off completely and then putting our phone bill on one and cable bill on another and paying it off monthly with autopay. My wife has the car insurance on another. I want to hide the cards and not use them ever besides those regular monthly bills on them. Thatll free up the debt in general.
If we free up all of these bills, essentially we will only have 6 monthly bills. I want to know if you guys think we should pay the car off or keep the 300 a month payment? Also if the credit cards idea is a good one. Is it smart to put those 3 bills (phone, cable, insurance) on 3 separate cards and pay each of those cards off every month? Or should we allocate all the bills onto one credit card and pay that one off. Or just pay the bills and forget about using the credit cards that way.
The last question is where we are stumped. After everything is paid off, we will have 65k cash. Between the both of us we net around 8k a month. And gross 9k. Wed like to attempt to save about 4k a month, more if possible but within reasonable limits for 2 years. We want to have a large enough down payment to where mortgage isnt a crazy high amount. We have the credit and income to get approved with the 65k, but that isnt necessarily the smartest choice. So in the mean time. What do I do with the 65k? Obviously put it away, but where? What type of options do we have and what kind of returns should I expect? The other matter that needs to be smoothed out is what do we do with the extra 4k a month that were saving? Just a regular savings account?
What I've been told range between your run of the mill savings account to a money market.
So I leave it to you reddit. Advise me.
Submitted March 30, 2019 at 11:32AM by rubbermbn https://ift.tt/2U7yfdU
