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Too many options, I'm confusing myself...

Senior Contributor

Too many options, I'm confusing myself...

Wifey and I purchased a home late in 2013.  We got a heck of a deal on a very nice home in fairly rough shape.  We did a lot of the fixing up ourselves.  Currently, we are rather house rich, but cash poor. 

 

We purchased this home primarily for the street address.  Had two children still in the public school system and were willing to pay the price (and the property taxes) to put them in the school district that we're in.  (Top five in the state every year.)

 

Nearly four years later, we are still house rich and cash poor.  Our youngest is now a Senior in High school, and we no longer require this address. 

 

We love the house, but it is a bit much for us.

 

We could sell out...pay off the mortgage and the home equity loan and still have enough cash left from the sale to purchase a smaller home home outright.  NO MORTGAGE payment.

 

Someone tell me why that is a bad idea. 

 

 



Zero percent financing is where the devil lives...

10/01/17 Fico8 scores: EX 660, EQ 647, TU 663
Message 1 of 14
13 REPLIES
Regular Contributor

Re: Too many options, I'm confusing myself...

Sounds like you have it all worked out. Or sounds like you want a reason to stay. Id say down size and get a great location too.
Message 2 of 14
Valued Contributor

Re: Too many options, I'm confusing myself...

I love the idea of no mortgage payment!  Smiley Happy

 

So food for thought...I kept downsizing as the kids left the nest.  It meant that coming back home to live long term was out of the question.  They knew it.  I knew it.  Short term was great.  I store 2 relatively small boxes of keepsakes (one of china, one of memories) for one of the kids and a photo album for the other kid.  Kid = adult.  

 

There's a very comfy couch for overnight guests.  There's comfy air mattresses for overnight guests.  If older than me folks visit, then I give up my bed for them.  It all works.  Smiley Happy  No one stays in a hotel.  (At most, I had 4 people living in about 600 square feet total.  And no one choose the Harry Potter room under the stairs or the 5' shower.  So really, I could have accommodated 2 more people.)

 

I love it.  I actually did upgrade by a few hundred feet last year?  Year before?  It's all a blur now.  

 

Go for it!  Make sure you save that mortage payment for retirement or a rainy day fund. Smiley Happy

 

 

Message 3 of 14
Established Contributor

Re: Too many options, I'm confusing myself...

I like this thread!  I have a high schooler and am thinking ahead too.

 

It sounds like the best financial decision for you and your wife is to downsize.

However you say you both love the house.  So there is an emotional component.

 

I would ask your wife how she would feel about it and ask your kids too.  Some people get very attached to the memories in their homes.  It can be emotionally disastrous to make these changes.  Just read online all the stories of people who regret selling their house.

 

I would proceed with caution and get everyone's input.  Then make a firm decision.

 

Good luck!

Message 4 of 14
Valued Contributor

Re: Too many options, I'm confusing myself...

I see no downsides. I am 1 year from being an empty nester. We live in a top district and I cannot wait to leave smoke trails as I escape this high COL area. 

 

Like someone else said, my kids know that my home is not your forever home. I expect you to grow up -- fully. So I plan on a 2 bedroom home, hopefully with finished basement. Meaning guests / short-term stays: sure. LIVING HERE: Nope. 

 

The only time I see people claiming you shouldn't pay off your mortgage is the whole argument of "investing" the cash. 


Bleh. If that's your thing, sure. But to say the average person should pay a mortage for 30 years so they can 'invest' is just silly to me.  In my area, let's say I bought something for $200k with 20% down. That would give me a mortgage of around $1,000. I should pay a total of $360k for the home? NOPE. Because I'm not going to invest enough to make paying an extra $160,000 worth it. If I had $200k I would definitely buy the home outright and know my largest expense (for most people) is pretty much covered. 

(obviously still have to pay taxes/insurance).

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Message 5 of 14
Established Contributor

Re: Too many options, I'm confusing myself...

High COL-YES!  So frustrating to have to pay so much for a decent school district!  Can't wait to be free to live elsewhere!

Message 6 of 14
Senior Contributor

Re: Too many options, I'm confusing myself...

Thanks all for the excellent responses.

 

We are still chewing on this one.  Kiddo is about to start college and is planning to live at home and commute for her first four years, and we are absolutely fine with that.  (Our home is open, available, and rent free for full time students.)

 

Kiddo has NEVER liked her bedroom and is probably more ready to sell out and move than either of her parents are.  Smiley Happy

 

Frankly, I LOVE the idea of buying a smaller house cash and having NO mortgage payment.

 

DW and I (and TWO of the kiddos) put a lot of blood, sweat, and elbow grease into rebuilding this home and making it "ours".  ( How many of you have a 200 sq ft laundry room???)

 

...still thinkin....



Zero percent financing is where the devil lives...

10/01/17 Fico8 scores: EX 660, EQ 647, TU 663
Message 7 of 14
Highlighted
Valued Contributor

Re: Too many options, I'm confusing myself...

Let us know what you decide!

 

No mortgage is a wonderful thing...especially if you can keep debt free and stil save.

Message 8 of 14
Established Contributor

Re: Too many options, I'm confusing myself...


tcbofade wrote:

Thanks all for the excellent responses.

 

We are still chewing on this one.  Kiddo is about to start college and is planning to live at home and commute for her first four years, and we are absolutely fine with that.  (Our home is open, available, and rent free for full time students.)

 

Kiddo has NEVER liked her bedroom and is probably more ready to sell out and move than either of her parents are.  Smiley Happy

 

Frankly, I LOVE the idea of buying a smaller house cash and having NO mortgage payment.

 

DW and I (and TWO of the kiddos) put a lot of blood, sweat, and elbow grease into rebuilding this home and making it "ours".  ( How many of you have a 200 sq ft laundry room???)

 

...still thinkin....


My entire apartment is just 295 sq ft. Haha.

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Message 9 of 14
Senior Contributor

Re: Too many options, I'm confusing myself...


SteelerNYC wrote:

tcbofade wrote:

Thanks all for the excellent responses.

 

We are still chewing on this one.  Kiddo is about to start college and is planning to live at home and commute for her first four years, and we are absolutely fine with that.  (Our home is open, available, and rent free for full time students.)

 

Kiddo has NEVER liked her bedroom and is probably more ready to sell out and move than either of her parents are.  Smiley Happy

 

Frankly, I LOVE the idea of buying a smaller house cash and having NO mortgage payment.

 

DW and I (and TWO of the kiddos) put a lot of blood, sweat, and elbow grease into rebuilding this home and making it "ours".  ( How many of you have a 200 sq ft laundry room???)

 

...still thinkin....


My entire apartment is just 295 sq ft. Haha.


Oh my.  We are spoiled and we know it.

 

We spent a weekend at the Hilton last year, and missed our bedroom and custom bathroom. 

 

(You know you are spoiled when you weekend at the Hilton and find the accomodations sub par....)

 

For the moment, I think that we are going to stay put.  Over the next few years, our home value should continue to increase while our mortgage balance goes down... we've got quite a bit of home equity, and are gaining every year.

 

Might stay put until that number gets large enough to purchase a medium sized house with it...



Zero percent financing is where the devil lives...

10/01/17 Fico8 scores: EX 660, EQ 647, TU 663
Message 10 of 14