Purchasing a house, downpayment vs. retirement and other considerations

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Brantley
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Brantley » Thu May 24, 2018 7:42 pm

ktip wrote:
Thu May 24, 2018 7:02 pm
I think your idea of switching from a serious to casual search is wise. Since it's not known what house prices will do over the next few years, it seems off to assume a 10+% annual price increase, and make that assumption the driver of your decision. On the other hand, there are a lot of “knowns” that suggest you should wait a few years.

If you are going ahead with this, I’d ask the in-laws for that $100-200k gift right at the beginning, with the down payment and closing costs. Then at least their assistance is settled and done, and no longer something out of your hands (your plan involves much out of your control, including the continued good health of the in-laws). As delamer said at the start, it’s not clear why you’d worry about a gift tax. My understanding is that if a gift is over the annual $15k, the givers report it to the IRS and the amount is later counted against their lifetime estate tax exemption. And if you take the in laws’ money upfront, hopefully you are not having to go back.

BTW I live in an apparently tiny 1000 sq ft house with a partner, kid, dog, and maybe, soon, a second kid. :wink: We enjoy the quality of life that comes with having extra cash in the budget. We are not high income but can save plenty for retirement, handle unexpected maintenance (like the 2k for the trees that had to be removed a few weeks ago), put money into renovations to make our tiny house and yard very nice, send the kid to cool camps this summer, travel lots, and I can and did get a new truck in a splurge my partner described as “obscene.” None of that is stressful nor a decision where one valued thing has to be sacrificed for another valued thing. This wouldn’t be the case if we had a more expensive house.

If you buy now, you will have a very expensive house in a great neighborhood near family, which is awesome, but, as other folks have said, you will risk the low stress and quality of life that your income could otherwise provide. That’s obviously a value choice, but some of the posters are saying you can have it all if you wait a bit.
I still have a strong belief that the market will at least hold steady while interest rates rise, and it will simply cost me more to buy the house 2-3 years from now. I grew up in this town, I’ve seen it change, and I very much doubt houses prices will lower. Best case scenario the growth will slow. Unless I truly make it in my career (in which this convo would be a moot point), I am thinking to buy now and rather than risk not being able to live in Needham at all. Any posters here also know the area and feel differently? I understand the risks posters are bringing up, but I think it’s worth getting into this town. I look forward to revisiting this post 5 years from now and seeing if I was right or not. To be continued.
~Brantley

KlangFool
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by KlangFool » Thu May 24, 2018 8:23 pm

Brantley wrote:
Thu May 24, 2018 7:42 pm
ktip wrote:
Thu May 24, 2018 7:02 pm
I think your idea of switching from a serious to casual search is wise. Since it's not known what house prices will do over the next few years, it seems off to assume a 10+% annual price increase, and make that assumption the driver of your decision. On the other hand, there are a lot of “knowns” that suggest you should wait a few years.

If you are going ahead with this, I’d ask the in-laws for that $100-200k gift right at the beginning, with the down payment and closing costs. Then at least their assistance is settled and done, and no longer something out of your hands (your plan involves much out of your control, including the continued good health of the in-laws). As delamer said at the start, it’s not clear why you’d worry about a gift tax. My understanding is that if a gift is over the annual $15k, the givers report it to the IRS and the amount is later counted against their lifetime estate tax exemption. And if you take the in laws’ money upfront, hopefully you are not having to go back.

BTW I live in an apparently tiny 1000 sq ft house with a partner, kid, dog, and maybe, soon, a second kid. :wink: We enjoy the quality of life that comes with having extra cash in the budget. We are not high income but can save plenty for retirement, handle unexpected maintenance (like the 2k for the trees that had to be removed a few weeks ago), put money into renovations to make our tiny house and yard very nice, send the kid to cool camps this summer, travel lots, and I can and did get a new truck in a splurge my partner described as “obscene.” None of that is stressful nor a decision where one valued thing has to be sacrificed for another valued thing. This wouldn’t be the case if we had a more expensive house.

If you buy now, you will have a very expensive house in a great neighborhood near family, which is awesome, but, as other folks have said, you will risk the low stress and quality of life that your income could otherwise provide. That’s obviously a value choice, but some of the posters are saying you can have it all if you wait a bit.
I still have a strong belief that the market will at least hold steady while interest rates rise, and it will simply cost me more to buy the house 2-3 years from now. I grew up in this town, I’ve seen it change, and I very much doubt houses prices will lower. Best case scenario the growth will slow. Unless I truly make it in my career (in which this convo would be a moot point), I am thinking to buy now and rather than risk not being able to live in Needham at all. Any posters here also know the area and feel differently? I understand the risks posters are bringing up, but I think it’s worth getting into this town. I look forward to revisiting this post 5 years from now and seeing if I was right or not. To be continued.
Why the real estate market has to behave exactly as your beliefs? Your beliefs is not rational at all. Unless all the buyers pay cash, the cost of buying a house will go up. There will be less buyers.

KlangFool

badmojo
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by badmojo » Thu May 24, 2018 8:53 pm

This is a very captivating post since I was in similar place few years ago. I will say that I and the DW are close to your age Brantley and with a similar income. I desired to be inside 95 (it was not a concrete need) but you have to factor in all of the unknowns (there are a lot and you need to play them out..the what ifs). There are too many variables to consider the 1M$ purchase especially when you through in multiple kids, trust me I know (I have two now) and it is always changing.
School systems will start to get important when they are in elementary school (I will purchase in about five year again), when they are young you will need that income to be spent on activities and reduced care due to the MIL+FIL help( they will not keep up once they are mobile…maybe for a few hours but not 8-10hrs). You could decide later and by that time you will have more options based on a lager money pile you will have accumulated. Good luck to you my advice is to consider something less. BTW you are doing great and are way ahead in achieving FI.

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Brantley
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Brantley » Thu May 24, 2018 11:56 pm

badmojo wrote:
Thu May 24, 2018 8:53 pm
This is a very captivating post since I was in similar place few years ago. I will say that I and the DW are close to your age Brantley and with a similar income. I desired to be inside 95 (it was not a concrete need) but you have to factor in all of the unknowns (there are a lot and you need to play them out..the what ifs). There are too many variables to consider the 1M$ purchase especially when you through in multiple kids, trust me I know (I have two now) and it is always changing.
School systems will start to get important when they are in elementary school (I will purchase in about five year again), when they are young you will need that income to be spent on activities and reduced care due to the MIL+FIL help( they will not keep up once they are mobile…maybe for a few hours but not 8-10hrs). You could decide later and by that time you will have more options based on a lager money pile you will have accumulated. Good luck to you my advice is to consider something less. BTW you are doing great and are way ahead in achieving FI.
How much less?
~Brantley

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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Jags4186 » Fri May 25, 2018 5:56 am

Brantley wrote:
Thu May 24, 2018 11:56 pm
badmojo wrote:
Thu May 24, 2018 8:53 pm
This is a very captivating post since I was in similar place few years ago. I will say that I and the DW are close to your age Brantley and with a similar income. I desired to be inside 95 (it was not a concrete need) but you have to factor in all of the unknowns (there are a lot and you need to play them out..the what ifs). There are too many variables to consider the 1M$ purchase especially when you through in multiple kids, trust me I know (I have two now) and it is always changing.
School systems will start to get important when they are in elementary school (I will purchase in about five year again), when they are young you will need that income to be spent on activities and reduced care due to the MIL+FIL help( they will not keep up once they are mobile…maybe for a few hours but not 8-10hrs). You could decide later and by that time you will have more options based on a lager money pile you will have accumulated. Good luck to you my advice is to consider something less. BTW you are doing great and are way ahead in achieving FI.
How much less?
Keep the mortgage at around 2x your income. So if you have $200k to put down, your inlaws are giving you $200k, and you get a 350k mortgage, $750k would be your limit. If your inlaws are giving you $150k and you only have $150k to put down, then you’re looking at $650k.

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slow n steady
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by slow n steady » Fri May 25, 2018 11:49 am

Brantley,

The hits just keep coming but you are taking it like a champ.

I've read the entire thread and it appears you will likely make a purchase soon. I am a couple years older than you but my wife and I are in our third home. The first home was 3600 sq. ft. with just the two of us. The second home was 3000 sq. ft. with one kid. Now we live in a 1250 sq. ft. town home with two kids and plans for a third. We are actually happiest in our current location. We do plan to move into a bigger home again in several years.

We live in a different universe then you when comparing home prices. We bought our town home two years ago for 100k. Our incomes are also much less than yours.

Living in the bigger homes, it always ate away at me how much space I was paying for that I never used. I don't have that issue anymore. I also enjoy not having to do yardwork or worry about anything on the exterior. We do have to pay a higher HOA, but the amount is much less then we were paying for the extra space we didn't use. I love not being stressed about money.

Kids don't take up space for the first few years. If I was in your shoes, I would keep renting until your first child was 2 or 3. This gives you 5-7 years to keep saving at a great pace. Also during that time, your wages will either increase by quite a bit or they will not. If they do increase, you will be able to purchase the home that is now 800k for 1.2M later if prices keep rising. If your wages don't increase, it probably wouldn't have been a good idea to buy the expensive house right now anyways. The in-laws will probably still help you out if you wait a few years to purchase. If they don't, then it's a sign that taking their money now would have led to hard feelings.

I think if you buy the home now, there is probably an 80-90% chance that things will turn out ok. The 10-20% chance that things don't turn out ok would stop me from making the purchase.

If everything works out for you the way you plan, you won't be priced out even if prices go up. If everything doesn't go according to plan, chances are really good it would have been better to keep renting and saving.

I sincerely wish you the best of luck. Please update us when you come to a decision.

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Brantley
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Brantley » Fri May 25, 2018 12:02 pm

slow n steady wrote:
Fri May 25, 2018 11:49 am
Brantley,

The hits just keep coming but you are taking it like a champ.

I've read the entire thread and it appears you will likely make a purchase soon. I am a couple years older than you but my wife and I are in our third home. The first home was 3600 sq. ft. with just the two of us. The second home was 3000 sq. ft. with one kid. Now we live in a 1250 sq. ft. town home with two kids and plans for a third. We are actually happiest in our current location. We do plan to move into a bigger home again in several years.

We live in a different universe then you when comparing home prices. We bought our town home two years ago for 100k. Our incomes are also much less than yours.

Living in the bigger homes, it always ate away at me how much space I was paying for that I never used. I don't have that issue anymore. I also enjoy not having to do yardwork or worry about anything on the exterior. We do have to pay a higher HOA, but the amount is much less then we were paying for the extra space we didn't use. I love not being stressed about money.

Kids don't take up space for the first few years. If I was in your shoes, I would keep renting until your first child was 2 or 3. This gives you 5-7 years to keep saving at a great pace. Also during that time, your wages will either increase by quite a bit or they will not. If they do increase, you will be able to purchase the home that is now 800k for 1.2M later if prices keep rising. If your wages don't increase, it probably wouldn't have been a good idea to buy the expensive house right now anyways. The in-laws will probably still help you out if you wait a few years to purchase. If they don't, then it's a sign that taking their money now would have led to hard feelings.

I think if you buy the home now, there is probably an 80-90% chance that things will turn out ok. The 10-20% chance that things don't turn out ok would stop me from making the purchase.

If everything works out for you the way you plan, you won't be priced out even if prices go up. If everything doesn't go according to plan, chances are really good it would have been better to keep renting and saving.

I sincerely wish you the best of luck. Please update us when you come to a decision.
Thanks for the post. I have considered the option of renting for the first few years of having a kid, but that would be tough in our current apartment. It is a one bedroom and temperature control is sub-par given that the building is quite old. If I wanted a nicer apartment with similar perks to Brookline (maybe Cambridge near the train, or Southie/Seaport) I would have to pay for increased market rent + additional cost of 2 br/nicer place. Likely not worth the cost (I would expect a minimum of $2,500/month). Also, based on my read of the market it may take us quite some time to find the right place which would allow us to build up a larger down payment.

The last year, in which we have had our peak earnings thus far, we had to shell out a large wad of dough given our wedding, honeymoon, rings, bachelor party, etc, and half of my friends got married as well. I have scaled back the 401k to just the match and am hammering away at putting money into our high-yield saving account. We are generally pretty frugal, so I wouldn't be surprised if we are able to sock away a sizable nut.
~Brantley

Flyer24
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Flyer24 » Fri May 25, 2018 12:31 pm

Life gets dang expensive as you get older especially with kids. I am in my 40’s with two kids. I make $180k a year and live in a $250K house. There is no way in the world I could afford a million dollar home. It is just stupid. Wait until you are paying for kid’s activities, clothes , food etc and you will see that your “forecasted budget” is not even close. I don’t get this generation of dependency on parents/in-laws. Cut the strings and have some pride. My in-laws have done well but I have never asked for a dime. I bought an affordable house and live well within my means. Thank them for gift but do the rest on your own. Get a mortgage that you never need someone else’s help. Trust those of us who are older when we say you can’t afford this house. Money goes quick.

jk998846
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by jk998846 » Mon May 28, 2018 10:47 am

OP,

I am also in the housing market near Needham. Very nice town. It is becoming another Newton / Wellesley.

I see many good posts in this thread. However, every housing market is different. Not sure how many posters live in this area but what I see here is that the "normal rule of thumb" doesn't apply. Many of my friends / colleagues / church members have mortgage 5x - 6x of annual house hold income. And they are doing fine as far as I can tell. Of course, they compromised things to make it work such as luxury vacations / German cars / nice dine-outs etc...

Median real estimate value here is $1.3M. There are many extraordinary rich people here but I also see "normal household" every corner. I also think your concern being "outpriced" is legit. I understand the rising rates might slow things down. But not so much here (but certainly not like 10% like you are projecting). Boston surburban is always short on supply.

There are many factors causing the short supply:
-There are many "historic" districts. Construction is strictly restricted in some areas and you can't build more houses and no expansion allowed.
-Well-known universities / colleges. People come from all over the world because of these institutions.
-Big companies are coming to Boston. One example is GE. But there are many more.

I can go more but I think you get the point here.

Based on your numbers, I think you can afford it and you will be fine. I have seen these working before and still working fine.


However, I am afraid I am not convinced if you "need" the house. You are young and have no kids. Why would you limit your potential and settle down (I mean by purchasing a house) in such young age? I understand the hometown and the family bond. But you have many decades ahead. You never know what the life will bring to you. You will have to make decisions along the way. The Needham house will be one of the lists (and it will be a big one) to consider.

If I were you, I would take a dip breath and wait to see how the market reacts with the higher rates. I already started seeing the first sign of slow down (houses stay in the market longer than usual). Your savings might outpace the appreciation or vice versa. You never know. But at least you will have an option.

Good luck!

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Brantley
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Brantley » Wed Jul 18, 2018 8:28 pm

Hey all,

I have an update. We put an offer in on a home over the weekend that was accepted in Needham, and the inspection went perfectly today. We really lucked out as Needham was a ghost town and there were very few people at the open house. We were able to get the house below asking, and did not have to waive an inspection. We met the owners at the inspection and they are wonderful people who truly cared for the home.

We were able to get a lower interest rate than I was expecting (4.25%) and this is certainly a forever home (~2,200 sq ft, 2 car garage, 4 bedrooms, 2.5 bath). Hopefully all goes well with the process, but I will check in.
~Brantley

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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by pascal » Wed Jul 18, 2018 8:37 pm

Congratulations Brantley!
"Never underestimate the ability of a bad situation to get worse...rapidly." Ninegrams

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wabbajack
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by wabbajack » Wed Jul 18, 2018 10:46 pm

Brantley wrote:
Wed May 23, 2018 4:26 pm
chillyuber wrote:
Wed May 23, 2018 4:19 pm
Brantley wrote:
Wed May 23, 2018 4:17 pm
Olemiss540 wrote:
Wed May 23, 2018 3:25 pm
I think you are feeling rushed to not be "priced out".
I disagree and think this is a serious concern if we want to live in this town. I would not be surprised if a few years from now we couldn't afford a home as inventory in our price range is shrinking and prices are rising.
You are already priced out of Needham.
I don't agree with this based on the houses I have seen. I expect I can find a home in the 800-900k range and based on my budget we can afford the payments+incremental home ownership costs and then some. Currently not priced out, but likely will be in the near future.
Posting from the Midwest, but I bought a house recently in a red hot market (beat 8 offers), so I thought I'd offer some input. Have you considered renting in the town you'd like when your children are school-aged? If it's the school system you care about, that seems like a much more efficient use of everyone's money.

Also second all the points that were made about houses being money pits. You'll start paying for all kinds of random crap that can quickly turned unaffordable. I make low 100s and bought a 150k house, and I'm already annoyed at all the stuff I've had to maintain/fix.

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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Golf maniac » Sun Aug 12, 2018 3:52 pm

For OP, why come on here for “gut check” if you already made up your mind? As many have said from a boglehead perspective it is never good to cut retirement savings for house. I understand you believe in your late 20s that you know everything but there is some great wisdom in some of these old folks on these boards.

What if your wife decides she can’t leave her child with anyone, including her parents and your income is cut in half? What if one or both of your in laws have major medical issues and can’t take care of your future children, will you and your wife be willing to drop your kids off at a daycare to keep the lifestyle? What if your in laws have major issues that require 5 years of nursing home care and inheritance is gone?

Life happens, living well UNDER your means, saving for retirement, and limiting debt has always been my motto. But, you have made your decision, so good luck.

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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by jharkin » Sun Aug 12, 2018 4:02 pm

jk998846 wrote:
Mon May 28, 2018 10:47 am
OP,

I am also in the housing market near Needham. Very nice town. It is becoming another Newton / Wellesley.

I see many good posts in this thread. However, every housing market is different. Not sure how many posters live in this area but what I see here is that the "normal rule of thumb" doesn't apply. Many of my friends / colleagues / church members have mortgage 5x - 6x of annual house hold income. And they are doing fine as far as I can tell. Of course, they compromised things to make it work such as luxury vacations / German cars / nice dine-outs etc...
There is a 4000 sq ft house up the road from me with a Rover and a Porsche Cayenne in the driveway. Looks like they are doing well, right?

... Well the house is listed as an upcoming foreclosure auction on Zillow.

This is the problems with all your friends paying 6x salary... They "appear" to be doing fine, but mostly likely they are living on the bleeding edge using credit with no savings for the future ("income statement" affluent in the words of Stanley)

I worked in Needham for over 20 years up until this past May. I now work in Natick. I live in this area (we rented in Brookline and Newton in our 20s, then moved out close to 495 to buy)... No WAY would I buy a 1M, or even 850k, house on 170 income. We make about 50k more gross and are considering about 600k as our cap for the next move (current house was acquired in the 300s - yes its doable, just drive 30 minutes west to Ashland or Milford, etc).

The next downturn is going to reveal how many of these Boston metro McMansion Emperors really have no clothes... I suspect more than a few.

Its too late now but I would have been another "dont do it!" vote. Hopefully the OP makes out ok.
Last edited by jharkin on Mon Aug 13, 2018 7:32 am, edited 2 times in total.

Jefferson
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Jefferson » Sun Aug 12, 2018 8:33 pm

I’ll add another futile comment.

You’re a CPA at a Big 4 firm, so I assume you’re familiar with contracts. This mortgage is essentially a (very large) contract for you. There is one very simple rule with contracts: Always be willing to walk away.

You have made it clear that you are Needham (sp?) or bust. And that it has to be now because of (IMO) an irrational fear of being ultimately priced out. These two factors alone make it incredibly difficult for you to get a good deal (both from an investment and personal financial perspective).

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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Tribonian » Sun Aug 12, 2018 8:43 pm

Brantley wrote:
Wed Jul 18, 2018 8:28 pm
We put an offer in on a home over the weekend that was accepted in Needham ....

We were able to get a lower interest rate than I was expecting (4.25%) and this is certainly a forever home (~2,200 sq ft, 2 car garage, 4 bedrooms, 2.5 bath). Hopefully all goes well with the process, but I will check in.
Congratulations, Brantley. I look forward to seeing an update in a year or two or whenever you get around to it.

Best Wishes & Good Luck!

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Brantley
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Brantley » Sun Aug 12, 2018 9:11 pm

Tribonian wrote:
Sun Aug 12, 2018 8:43 pm
Brantley wrote:
Wed Jul 18, 2018 8:28 pm
We put an offer in on a home over the weekend that was accepted in Needham ....

We were able to get a lower interest rate than I was expecting (4.25%) and this is certainly a forever home (~2,200 sq ft, 2 car garage, 4 bedrooms, 2.5 bath). Hopefully all goes well with the process, but I will check in.
Congratulations, Brantley. I look forward to seeing an update in a year or two or whenever you get around to it.

Best Wishes & Good Luck!
Thanks Tribonian
~Brantley

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sergeant
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by sergeant » Sun Aug 12, 2018 10:12 pm

Congratulations on the home purchase. I hope it all works out for you. Did the in laws come through with the 200k down payment?
Lincoln 3 EOW!

alpinegoat
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by alpinegoat » Sun Aug 12, 2018 10:34 pm

I have sincerely enjoyed reading this thread. Brantley - congratulations on your big purchase. Thank you for sharing such a personal journey with us. Please do keep us updated - bogleheads advice could be helpful in many ways as you enter this next phase of your financial life.

I can relate a lot to your situation, and wish you the best.

My advice (and remember that free advice is worth what you pay for it!) would be to (1) save as much as possible in your short and medium terms savings vehicles (e.g., HSA accounts, savings accounts, taxable investments that can be liquidated) over the next few years before kids happen. (2) Make sure you and your wife are making decisions as a team... one comment that you made was that you were hearing it from all sides and so it made me worry that your wife and her parents were aligned to convince you of what life you should have. (3) In law gifts could hopefully be annual and unsolicited so as not to strain the relationship, making your thanksgiving turkey taste different.

As Dave Ramsey says, I hope that Murphy doesn't move into your spare bedroom! (We had a tree fall on our house after 3 weeks of home ownership!)
Last edited by alpinegoat on Wed Aug 15, 2018 1:02 pm, edited 1 time in total.

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Brantley
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Brantley » Sun Aug 12, 2018 11:34 pm

sergeant wrote:
Sun Aug 12, 2018 10:12 pm
Congratulations on the home purchase. I hope it all works out for you. Did the in laws come through with the 200k down payment?
We landed on them contributing to renovations down the line rather than cash up front and buying a house closer to the $1M range.

Most of the houses I saw in the $1M range seemed to be missing key things to us, but had some fancy lipstick with renovated kitchens and bathrooms. I would walk into these homes at the first open house, and they would already have multiple offers. Almost all of them had issues to us such as:
-Tiny bedrooms
- Old school heating systems with radiators
- Odd layouts, some missing dining rooms, no good places to congregate
- No 2 car attached garage - this seemed like a rarity. Either 1 car that wouldn’t even fit my car or was detached.
- Fixed up cape house with no central air. Split or colonial would be preferred
- Tiny or odd shape lawn
- Not in the most neighborhoody area

The place we got has a great layout, was very well taken care of (I think its only been owned by the current owners who just retired), has expensive updates done that are not as eye popping as a fancy kitchen (new high end windows and blinds, new AC and water heater, new toilets, bathrooms sinks), is in a perfect neighborhood on a quiet street, has a good sized backyard but not too big, really nice garden and plants, 2 car attached garage, I can go on.

It will need some work, including a face lift to the kitchen and bathrooms, and will need a roof in probably a few years. If we want, we can easily take our time with these things, but I’m glad we did not overpay for shoddy renovations and were able to bypass the desperate families looking to get in before the school year, who were willing to pay anything for a turn key home.

We actually ended up getting it under asking as we acted quickly. There was no one in town the week after July 4th, and only a few went to the open house. We put in an offer that night, and were able to negotiate a deal before the second open house. After they accepted, I know that several other offers came in from other potential buyers so we probably saved at least $25k by being first movers.
~Brantley

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Brantley
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Re: Purchasing a house, downpayment vs. retirement and other considerations

Post by Brantley » Mon Aug 13, 2018 10:41 am

alpinegoat wrote:
Sun Aug 12, 2018 10:34 pm
I have sincerely enjoyed reading this thread. Brantley - congratulations on your big purchase. Thank you for sharing such a personal journey with us. Please do keep us updated - bogleheads advice could be helpful in many ways as you enter this next phase of your financial life.
Thanks alpinegoat. Really great advice below - I've got a few follow ups/comments:
alpinegoat wrote:
Sun Aug 12, 2018 10:34 pm
(1) save as much as possible in your short and medium terms savings vehicles (e.g., HSA accounts, savings accounts, taxable investments that can be liquidated) over the next few years before kids happen.
Would you prioritize one over the other here? My plan is to build back up a cash reserve so we do not have to tap inherited IRA for unexpected expenses, then switch to taxable.

My wife currently has a few thousand built up as unclaimed expenses in her HSA as we had some unexpected costs related to her vision. Her company currently contributes $500 a year towards this, so I will likely keep contributions low.
alpinegoat wrote:
Sun Aug 12, 2018 10:34 pm
(2) Make sure you and your wife are making decisions as a team... one comment that you made was that you were hearing it from all sides and so it made me worry that your wife and her parents were aligned to convince you of what life you should have.
I get the concern here based on what I have shared, and I think I may have misrepresented the situation. We are very much a team at the end of the day, but the family dynamics can be tricky to deal with. The wife can easily be swayed by her parents, but she is very independent and also really values my opinion at the end of the day. If I am not comfortable with something, she will listen to me and we get to the decision together. It is just challenging navigating her family as they are very tight nit. I think I am figuring it out day by day.
alpinegoat wrote:
Sun Aug 12, 2018 10:34 pm
(3) In law gifts could hopefully be annual and unsolicited so as not to strain the relationship, making your thanksgiving turkey taste different.
I wouldn't mind this - we will see how it goes.
~Brantley

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