Help with some changes

[ua_guy]

The last couple years has been a really long ride. I think? I'm at a point where I have enough resources to accomplish my goals of paving a good financial road through my 30's. My partner, who is also in his early 30's, is on board and is ready to act.

Check this out and tell me what you think.

We want to sell or refinance our home. Pulling the trigger on either option will come at an expense to both our emergency fund and retirement savings. After that, though, becomes about the rebuild process.

About our house: We purchased it in 2006 at a price of $444k. We were making much less money back then and got caught up in the interest-only loan schemes. The house is old (1968), and in the past 7 years we've sank about $85k in renovations and repairs into the home. We've since refinanced out of some really bad loans, and what was left of our income has gone into retirement and savings. The home is in decent condition now, all the major check boxes have been updated: Kitchen, flooring, roof, windows, doors, paint, fixtures, etc. It's in sale-ready condition. The drawback to keeping it is....it's still an old home. It doesn't fully meet our wants. We currently owe $430k between a $390k 5.375 30-year fixed primary, and a $40k 30y fixed 7.75% 2nd.

Option A: REFINANCE.

At the very least, the 2nd mortgage needs to be paid off.
In order to refinance the 1st, it will cost us $40k to pay off the 2nd loan, plus origination fees for the new primary, and paying down the first so we meet the equity requirements of the primary mortgage.

Total cost to do this would be about $70k. But wow, we'd have 20% equity in our home, on historical low, fixed interest rates.

Option B: SELL

The home is in sale-ready condition so we're looking at the cost to sell and the cost of getting into a new home. The cost to sell at a market-reasonable, quick sale of approx $425k would put us on the hook for about $40k in closing costs.

The homes we're looking at cost about $500k in a slightly cheaper area of our state. So, it would be a much better house for slightly more money. On a FHA 3.5% down loan, we'd be looking at about $25,000 between the down and origination fees.

Total cost would be about $65k-$70k. We'd be in our "forever" home at a historically low interest rate.

----

The big question is...where would the money come from, and is it safe or even advisable to do so?

We have about $55k in our emergency fund.
We have a total of about $120k in retirement accounts that could be taken as a disbursement, and not a loan. The value of those as a disbursement is about $72k cash after taxes and penalties.

So, we have $55k + $72k at our disposal. The remaining balance would stay in retirement, whatever we do not use in either scenario. We realize that after pulling the trigger on any option that we immediately fire-hose our income into emergency savings and retirement again.

We make approximately $230k/year as a household and that's only been recently. We realize we are very blessed and the influx of cash, now that our home is "repaired" is something to behold. We busted our collective asses through a bad economy, continued to pay our underwater mortgage on a problematic house, etc. It feels ripe time to change tracks to get started on our overall financial picture and goals.

Mentally and emotionally, we are done with our current home. It's been a long ride and fraught with unexpected problems and issues. Bottom line, we just don't want to be there anymore despite it being all fixed up. There is a cost associated with that, but it's intangible. I'm not sure that the perfect picture of financial stability now is enough to make us forget or be content with the home.

We have no children. Our only other debt is our vehicles and those are in good standing in terms of equity, payment, and interest (zero!). They don't really factor into the overall picture in terms of debt:income or available cash.


So...tell me what you think. I'm happy to answer clarifying questions if there are any.

[lorraineb]

Going for an upgrade using emergency fund and savings is a bad idea. You said it yourself -- "It doesn't fully meet our wants" -- not a need. If you want a new house, downgrade so that it is affordable without hitting your emergency fund or retirement.

I'm assuming that this is the only debt you have? No credit cards or other debts? If so, then paying off the second mortgage and replenishing the funds where you took the money can make sense. If you have other debt, you aren't ready to make a move like that.

[humandraydel]

I know it's not the answer you want, but there is absolutely no way I would pull all my money out of retirement accounts (and pay $60k in taxes/penalties!). IMHO you are not in a situation to do this. I think you need to continue to save $40k more in cash, that way when you do this you still have an emergency fund of $25k. Plus, you'll still have your retirement in place. I would assume you can save $40k in 2 years? It will be worth the wait.

[bjl584]

Pulling money out of retirement accounts and paying taxes and penalties should absolutely not be done. Bad idea. I think that you just need to be patient. Pay down your debts and continue saving cash.

[snafu]

I hope you guys find a reality check soon. Thus far your 'wants' have led you through several poorly thought out decisions reiterated as 'wanting' to buy a house without a 20% downpayment. Bowing to wants, you bought a woefully out dated house you couldn't afford in a 'bubble' market with an interest only loan. Didn't a professional inspection outline roof, window, electrical issues? I'm guessing you borrowed $85K for updates and renovations but devoted sweat equity. Refi gave you 5.37% 1st mortg. & 7.75% 2nd mortg. but at this point in time 2.2% mortgages are available to borrowers with high FICO type scores. After all those mortgage payments since 2006 you may owe as much as $ 470K.

Now your 'wants' lead you in another direction. Sell the house for less than you owe and buy another, more expensive house elsewhere. Compound it all by borrowing against retirement funds without a plan to repay and eliminate any emergency funds available. I hope you understand if you miss a re-payment on the retirement loan, there are grievous penalties and onerous tax to be paid. Someday when you are a senior these sums which need multi years of compounding may leave you wondering if you can make it through the end of the month without reaching the end of the money.

Notice I haven't touched upon life's challenges like loss of employment, accident/illness, break-up or even want another car...

[ua_guy]

Let me rephrase my story a little differently (there's a lot of lying, but the finances are the exact same):

My partner and I are in our early 30's. We spent the last 10 years paying off student debt and establishing an emergency fund. We don't think renting is for us anymore.

Interest rates are really good right now so we were thinking about jumping into the market. It looks like we could get a good deal on a home.

We don't have much of anything in retirement-- about $45k All of it would stay in place. That worries us (the amount), but we're now at a point where we can really start upping our contributions because I got a much better job about 18 months ago. It's going well and the income is great.

Our credit scores are both over 800. We have two car payments because we drive a lot, and we've owned older cars and know the expense of keeping them running. They're both very low interest, one at zero interest, and one of them is going to pay off in less than 2 years. The other one has about 3 years left on the loan but it's brand new. We don't carry gap insurance because we don't need to. Both cars are right side up.

But really, that's our only debt...our rent and our 2 cars.

We've saved some cash to put down on the new home. We won't quite be at 20% but we'll be a good way there. We've considered putting down just 5%. Interest rates are so low that it almost makes sense to hold some of our cash back.

The home we're looking to purchase is about $500k. Together we make $230k/year. With the cars, we'd be at 25% DTI. When one of the cars falls off in 2 years, even less.

We wouldn't completely wipe out our emergency fund. We'd have enough left to cover expenses for about 3 months right now, and the reality is that either of us could cover our mortgage on just one income. And, while we look for a home, we continue to save money so it's possible we might be up to that 6 month mark rather quickly.



Does that change things?

Nothing about the money or credit scores, vehicles, etc, has changed, only the story. We'll have $45k in retirememnt when all is said and done and more than 3 months worth of expenses in an emergency fund, possibly 6 by the time we made our move.

...

[ua_guy]

Furthermore, I'm not asking for permission.

I think the financial picture after the home purchase still looks promising. We'd be at 25% DTI, in a position to really start contributing to retirement and extra payments to the mortgage. The new monthly mortgage is almost net-even with what we're paying today at higher interest. So, nicer home, more desirable, a place we could see ourselves living forever, something built to last. The principal gets paid down quicker because of the better interest, and the day we move in, we still have some money in retirement and in emergency cash.

It's not scads of money by any means, but the homes we are looking at are "turn-key." We know exactly what it costs to maintain and remedy just about any home problem imaginable. We know good homes and bad homes, good construction, bad construction, cheap construction, and levels of maintenance. We've learned a hard lesson there and anything we buy will be rock solid. That is not a concern.

Despite erroneous judgement on here, we are not stupid people, and there was strategy behind buying our current home. Some things worked out for us, like not putting money down. That's money that would have been lost or would have put us in jeopardy of *not* having, given some of the issues that came up. We knew the house needed some cosmetic work and we had owned a home before. What we encountered weren't obvious issues. Many of the issues we encountered were blatantly hidden or disguised. I think I went through some of the stuff in another thread...we've been battling this home for years.

So...does any see the value of "moving on", with good income, and halfway decent saving strategy? I can only imagine having all that money we had to sink into the house -$85k, as cash. We paid cash for all of it, and still managed to save a good emergency fund and put money into retirement, etc. I think given that we have 30 years to rebuild, and seeing that the strategy also involves paying off the house, I'm not sure I see the ill-judgement. Or am I completely missing something?

I guess what it comes down to is....at what cost is it worth getting out of this place? I'd imagine it's different for every person, and apparently it's worth about $85k to me, or whatever it's going to cost to move, now.

[witchkizzle]

No one here is giving or withholding permission. It won't affect anyone here either way, so don't confuse advice with lack of permission.

In reality, you will do what you want and it will either work out well or not. Most people here give advice on what the best chance for success will likely be.

In my household's situation we are in our mid-twenties with income of 160k. My wife and I bought a house that cost 124k with a $26k downpayment. Our DTI is 6% including only one car payment that we bought for 32k and put 17k down on. Our property taxes are 2,400 a year and home insurance (including mandatory flood) is 1,900. Our mortgage payment alone is only $481 a month and we pay $1,500 minimum per month to get it paid off early. We also pay $1,500 a month to pay the car off early. After working for 2 years we have over 60k in our retirement accounts right now and also have 6+ months of expenses saved up and cash for vacations and whatever else we want. In terms of net worth we are at around 170k after 2 years of full time employment and one year of home ownership.

We have been working, and married, for 2 years and save 20% to retirement before employer contributions.

So based on my history, I could not imagine doing what you are laying out here. Projecting our situation out five years to match y'alls ages we will be in a different position. My wife will stay home with our kids (first one is on the way) and we will be relying on just my income which will only be in the 110-120k range at that point. So our situations are not identical.

Similar to our disagreement in the other thread, these are simply my opinions and are based off of the only thing I know, which is my own experience. I would never attempt to give "permission" in an online forum.

multiple edits for: typos, a lot of them.

[ua_guy]

No one here is giving or withholding permission. It won't affect anyone here either way, so don't confuse advice with lack of permission.

In reality, you will do what you want and it will either work out well or not. Most people here give advice on what the best chance for success will likely be.

In my household's situation we are in our mid-twenties with income of 160k. My wife and I bought a house that cost 124k with a $26k downpayment. Our DTI is 6% including only one car payment that we bought for 32k and put 17k down on. Our property taxes are 2,400 a year and home insurance (including mandatory flood) is 1,900. Our mortgage payment alone is only $481 a month and we pay $1,500 minimum per month to get it paid off early. We also pay $1,500 a month to pay the car off early. After working for 2 years we have over 60k in our retirement accounts right now and also have 6+ months of expenses saved up and cash for vacations and whatever else we want. In terms of net worth we are at around 170k after 2 years of full time employment and one year of home ownership.

We have been working, and married, for 2 years and save 20% to retirement before employer contributions.

So based on my history, I could not imagine doing what you are laying out here. Projecting our situation out five years to match y'alls ages we will be in a different position. My wife will stay home with our kids (first one is on the way) and we will be relying on just my income which will only be in the 110-120k range at that point. So our situations are not identical.

Similar to our disagreement in the other thread, these our simply my opinions and are based off of the only thing I know, which is my own experience. I would never attempt to give "permission" in an online forum.

I definitely don't think your advice is bad, by any means. I think you are in a different situation. Some of the big differences are we don't live in an area with affordable housing. We also will never have children.

So when people advise against this, I think all things need to be considered. Not having children is an approximate savings (according to national studies) of $250,000 over 18 years.

Once again, I think the future financial picture is good. Good income, good loans at historically low interest rates on a good home, we will have retirement savings and emergency funding---minimal to start, but with our incomes we think we can be on a path to normal in the next 2-3 years.

Does anyone see the "good" in this? I've read plenty of stories of people in their 40's and 50's trying to start over. I've got all the right tools, but for some reason this scenario is seen as a total negative, yet I've got a good 10 years on those people and I'm not starting with insurmountable debt. The house is now worth more than we owe and that's our biggest debt. NO credit cards, NO student loans, NO judgements/alimony, NO children, I'm already putting 10% into a new retirement account and I'm fully funding my HSA, and I'm still saving cash. I feel like I'm doing all the right things, but maybe not?
???

[witchkizzle]

I definitely don't think your advice is bad, by any means. I think you are in a different situation. Some of the big differences are we don't live in an area with affordable housing. We also will never have children.

So when people advise against this, I think all things need to be considered. Not having children is an approximate savings (according to national studies) of $250,000 over 18 years.

Once again, I think the future financial picture is good. Good income, good loans at historically low interest rates on a good home, we will have retirement savings and emergency funding---minimal to start, but with our incomes we think we can be on a path to normal in the next 2-3 years.

Does anyone see the "good" in this? I've read plenty of stories of people in their 40's and 50's trying to start over. I've got all the right tools, but for some reason this scenario is seen as a total negative, yet I've got a good 10 years on those people and I'm not starting with insurmountable debt. The house is now worth more than we owe and that's our biggest debt. NO credit cards, NO student loans, NO judgements/alimony, NO children, I'm already putting 10% into a new retirement account and I'm fully funding my HSA, and I'm still saving cash. I feel like I'm doing all the right things, but maybe not?
???

The plan might not be bad, but you just have to see where people on this board are coming from. You will get a majority "stay and pay down the debt" because that is what the majority of people here would do. It is pretty rare on this board, since it is appropriately named Savings Advice, for people to suggest someone take a rather large hit and start over. Most people here are going to say "what is wrong with your current situation, you have an expensive house, great jobs, are able to save cash and for retirement...".


I see where you are coming from, though. Ready to move, able to move, willing to take the 85k hit (even though I can't help but think that is not the total hit you will take), and start over fresh in a nicer, newer house in a lower cost area.

My advice wouldn't change, though. Stay and pay down and you can be very wealthy in the future. 85k+ compounded over the next 40 years is not an insignificant amount to lose.

[riverwed070707]

Let me rephrase my story a little differently (there's a lot of lying, but the finances are the exact same):

My partner and I are in our early 30's. We spent the last 10 years paying off student debt and establishing an emergency fund. We don't think renting is for us anymore.

Interest rates are really good right now so we were thinking about jumping into the market. It looks like we could get a good deal on a home.

We don't have much of anything in retirement-- about $45k All of it would stay in place. That worries us (the amount), but we're now at a point where we can really start upping our contributions because I got a much better job about 18 months ago. It's going well and the income is great.

Our credit scores are both over 800. We have two car payments because we drive a lot, and we've owned older cars and know the expense of keeping them running. They're both very low interest, one at zero interest, and one of them is going to pay off in less than 2 years. The other one has about 3 years left on the loan but it's brand new. We don't carry gap insurance because we don't need to. Both cars are right side up.

But really, that's our only debt...our rent and our 2 cars.

We've saved some cash to put down on the new home. We won't quite be at 20% but we'll be a good way there. We've considered putting down just 5%. Interest rates are so low that it almost makes sense to hold some of our cash back.

The home we're looking to purchase is about $500k. Together we make $230k/year. With the cars, we'd be at 25% DTI. When one of the cars falls off in 2 years, even less.

We wouldn't completely wipe out our emergency fund. We'd have enough left to cover expenses for about 3 months right now, and the reality is that either of us could cover our mortgage on just one income. And, while we look for a home, we continue to save money so it's possible we might be up to that 6 month mark rather quickly.



Does that change things?

Nothing about the money or credit scores, vehicles, etc, has changed, only the story. We'll have $45k in retirememnt when all is said and done and more than 3 months worth of expenses in an emergency fund, possibly 6 by the time we made our move.

...

Doesn't change the advice one bit -- you're way behind on retirement, your efund is insufficient and you don't have enough of a downpayment. We wouldn't advise anyone differently in this situation than your original becuase either way the numbers don't work.

Furthermore, I'm not asking for permission.

I think the financial picture after the home purchase still looks promising. We'd be at 25% DTI, in a position to really start contributing to retirement and extra payments to the mortgage. The new monthly mortgage is almost net-even with what we're paying today at higher interest. So, nicer home, more desirable, a place we could see ourselves living forever, something built to last. The principal gets paid down quicker because of the better interest, and the day we move in, we still have some money in retirement and in emergency cash.

It's not scads of money by any means, but the homes we are looking at are "turn-key." We know exactly what it costs to maintain and remedy just about any home problem imaginable. We know good homes and bad homes, good construction, bad construction, cheap construction, and levels of maintenance. We've learned a hard lesson there and anything we buy will be rock solid. That is not a concern.

Despite erroneous judgement on here, we are not stupid people, and there was strategy behind buying our current home. Some things worked out for us, like not putting money down. That's money that would have been lost or would have put us in jeopardy of *not* having, given some of the issues that came up. We knew the house needed some cosmetic work and we had owned a home before. What we encountered weren't obvious issues. Many of the issues we encountered were blatantly hidden or disguised. I think I went through some of the stuff in another thread...we've been battling this home for years.

So...does any see the value of "moving on", with good income, and halfway decent saving strategy? I can only imagine having all that money we had to sink into the house -$85k, as cash. We paid cash for all of it, and still managed to save a good emergency fund and put money into retirement, etc. I think given that we have 30 years to rebuild, and seeing that the strategy also involves paying off the house, I'm not sure I see the ill-judgement. Or am I completely missing something?

I guess what it comes down to is....at what cost is it worth getting out of this place? I'd imagine it's different for every person, and apparently it's worth about $85k to me, or whatever it's going to cost to move, now.

Your situation has improved -- use it to your advantage by spending a few years saving and getting truly ready for the move instead of throwing it away by leaping before you step. You worked hard to pay all those things off and improve your house, why would you want to hand over your chips and walk away right where you started?

I would hands down say the move you are planning is even worse than your decision to take an interst only loan Save, then buy. Don't buy because you have a low DTI ratio.

I definitely don't think your advice is bad, by any means. I think you are in a different situation. Some of the big differences are we don't live in an area with affordable housing. We also will never have children.

So when people advise against this, I think all things need to be considered. Not having children is an approximate savings (according to national studies) of $250,000 over 18 years.

Once again, I think the future financial picture is good. Good income, good loans at historically low interest rates on a good home, we will have retirement savings and emergency funding---minimal to start, but with our incomes we think we can be on a path to normal in the next 2-3 years.

Does anyone see the "good" in this? I've read plenty of stories of people in their 40's and 50's trying to start over. I've got all the right tools, but for some reason this scenario is seen as a total negative, yet I've got a good 10 years on those people and I'm not starting with insurmountable debt. The house is now worth more than we owe and that's our biggest debt. NO credit cards, NO student loans, NO judgements/alimony, NO children, I'm already putting 10% into a new retirement account and I'm fully funding my HSA, and I'm still saving cash. I feel like I'm doing all the right things, but maybe not?
???

You're operating on a best case scenario. What happens if one of you loses your jobs? What if emergencies come up while you're trying to rebuild or if one of you becomes injured and can't work for a period of time. So much can happen and you can't make a plan that relies entirely on a good income you've had for 18 months. People start over at all ages, but you seem to be wanting to go backwards. Why? Just for a newer, nicer house? You need a priority check.

[ua_guy]

Doesn't change the advice one bit -- you're way behind on retirement, your efund is insufficient and you don't have enough of a downpayment. We wouldn't advise anyone differently in this situation than your original becuase either way the numbers don't work.


Your situation has improved -- use it to your advantage by spending a few years saving and getting truly ready for the move instead of throwing it away by leaping before you step. You worked hard to pay all those things off and improve your house, why would you want to hand over your chips and walk away right where you started?

I would hands down say the move you are planning is even worse than your decision to take an interst only loan Save, then buy. Don't buy because you have a low DTI ratio.



You're operating on a best case scenario. What happens if one of you loses your jobs? What if emergencies come up while you're trying to rebuild or if one of you becomes injured and can't work for a period of time. So much can happen and you can't make a plan that relies entirely on a good income you've had for 18 months. People start over at all ages, but you seem to be wanting to go backwards. Why? Just for a newer, nicer house? You need a priority check.

Saying I'm behind on retirement is a guess. Do you know how much I'm going to need for retirement? Do you know how much I should have? I'm not being onerous, those are questions. I don't plan on having a mortgage once I'm 50 years old...The house should be paid off.

Yes, one of us could become ill or permanently injured, but there's better chance of the financial markets collapsing again, and not recovering for a long, long time, which would make saving for retirement a moot point. What then??? Is everyone's advice of saving big for retirement valid then?

There's got to be an intersection of enjoyable living, being financially responsible, hedging against evils of the future, and also not being stalwart and immobilized by "what if's". What I'm asking is, does life still go on in this scenario I'm proposing? If yes, are my assumptions correct, if no, then why not?

I'm failing to see how a one-time hit of $85k is going to be the death of us. And that's at the maximum expenditure possible... we've calculated the high and low, down to the gnat's ass of what this move would cost us).

In the process we dump a relatively high interest mortgage, a high interest HELOC/2nd. I mean, I do understand Witchkizzle's sentiment-- this isn't "spending advice" -Forums, this is "Saving Advice" -forums. Perhaps I'm asking for advice in the wrong column here But in this scenario, I feel like the end result allows us to save more, but with the caveat of a big spend up front.

We save almost $120,000 in interest over 10 years by going with a new property. We also put ourselves in a home that has a better chance at appreciating. We also put ourselves in a home that doesn't need the time/money/attention our current home has needed (and will need) --simply because any home we buy will be in great shape.

Same advice, or different?

[riverwed070707]

Same advice. You want to spend now and save later and thats against all the advice you will find in this forum. You are looking for instant gratification instead of being willing to put in the time and effort to wait until you are really ready for this move. Bottom line is you're going to do what you want but why come here and ask for advice if you only want to hear from those who agree with you? The details you're looking at (liklihood of appreciation, etc) are irreelevant and don't hold a candle to the opportunity lost and investment earnings of cashing in your retirement.

[riverwed070707]

Looking at this another way, how do the numbers break down for the monthly payment? What is your monthly takehome? At $230,000 I'd guess somewhere around $14k? A $500k house with 3.5% down at 4% interest is going to run you around $2,300/mo +$80 PMI + (assumption of 5% property taxes) $2,100 = a payment of $4,480 not including homeowners insurance (which should be included) leaving you with a payment that is 32% of your income. Still not advisable. Housing should only encompass around 25% of your income, less is better. Why is it so important to you to rush this if the outcome is inevitably better by waiting?

Your option #1 was to refi and you mention having 20% equity. I'm not saying thats the best option for you especially given you don't plan to stay long term, but doesn't the idea of having a stake of ownership in your home feel good? Why would you want to further delay that?

[ua_guy]

Looking at this another way, how do the numbers break down for the monthly payment? What is your monthly takehome? At $230,000 I'd guess somewhere around $14k? A $500k house with 3.5% down at 4% interest is going to run you around $2,300/mo +$80 PMI + (assumption of 5% property taxes) $2,100 = a payment of $4,480 not including homeowners insurance (which should be included) leaving you with a payment that is 32% of your income. Still not advisable. Housing should only encompass around 25% of your income, less is better. Why is it so important to you to rush this if the outcome is inevitably better by waiting?

Your option #1 was to refi and you mention having 20% equity. I'm not saying thats the best option for you especially given you don't plan to stay long term, but doesn't the idea of having a stake of ownership in your home feel good? Why would you want to further delay that?

The numbers on a monthly payement break down as follows.

Current mortgage:
$3100

That includes both mortgages ($2700 first, $400 second, property tax, insurance). Total outstanding balance of $430k. Other terms are in original post.

New mortgage:
$3150

This is for a primary, $500,000 30y fixed mortgage, 3.526% with 3.5% down including PMI, property tax, and insurance.

The payment is virtually a wash. I've actually gone through the application process with a local bank and had approval status for a 2nd home at $500k. The good-faith estimate is remarkably close to that monthly payment number.

The benefit is we start paying down the home at a faster rate. Much of the cash we've been putting into our current home in terms of needed repairs is free for savings, retirement, or additional mortgage payments.

What I've been trying to say is, the situation doesn't necessarily improve if we wait. Interest rates may go up, the housing market may cool off. Despite what I've said about our current home, it is actually very desirable for a family and hits on all the major points. We have a chance to get out of it for what we owe right now, less the cost of selling. The cost of a "refi" gets effectively put towards the new home on new terms. The spend here is the cost of selling and the down payment for the new home.

If we stay in our home and do nothing, we're paying ridiculous sums of money in interest, making very slow headway on principal.

If we stay and refinance, we're sinking good money after bad because we no longer have a desire to be in this home. We see no reason to pay for a refinance if our goal is to leave.

If we sell now and buy something else, we save scads of money in interest over 10 years, have a better home, and begin paying principal down at a much faster rate.

I think I estimated the move at $85k on the high side. More than $45k of that comes from cash and the rest comes from retirement. All other retirement savings stay in place.

So, the advantage to waiting--we could easily save up more cash, but we also expect home prices to rise. That increase comes at the cost of our bad loans we have right now, plus interest in the home price increase when we take out a new loan. There are some other large repairs coming for our current home that I'd like to avoid. I.e. I would not be surprised if our furnace goes out this fall. There goes another $5k out the door. The water heater is on borrowed time as well. $600 gone before we can say "why are we still here?!"

The soft cost is the misery of being in this home and all its unforseen problems. That has a subjective worth and there are days when spending every last cent of my money feels like an acceptable solution to getting out of that home.