I know I just need to talk to a bank, but...

[BuckyBadger]

...until I do, I'll talk to you guys first!

My husband and I are moving to North Carolina. This happened VERY suddenly and with no preparation. I was offered a job out of the blue and I start in July. He will keep his current job and work from home.

This is our current plan -- I move down and rent an inexpensive apartment and start house hunting. He stays and prepares the house for sale. We are not planning on waiting until the current house sells before buying. It would be great if it did, but we're not going to wait for it. The old house is our starter home and we could swing two mortgages for a while if need be.

The old house is $1901 a month, including taxes, on the remainder of a 15 year mortgage. House is worth (hopefully) $270,000. We're looking to get a bigger house in preparation for a family, and we're looking in the $350,000 - $410,000 range. We'll get a 30 year on the new house, I think. Taxes are much lower where we're moving.

Now, we have about $65,000 that we could use for a down payment. We've got about $20k in a taxable account that's earmarked for retirement, but since the market has tanked I really don't want to pull anything out of that. Ditto all our Roth and 401k money. We have stopped making additional payments to the taxable account but are still on track to max everything out.

Now, my parents can loan us about $25,000 for carrying costs and expenses until the current house sells, but I'm not sure about getting a "bridge loan." As far as I understand, it's a loan to use toward your down payment that gets paid off when you sell your original house. I also seem to understand that you have to have equity in your current home, which we do. We owe about $200,000 on the house, so assuming we can get $260,000 for it, minus 6%, we'll get back about $45k.

So I think we'll be okay coming up with $80k for a down payment, and we'll eventually end up back with $30k in the bank.

But this is all kind of a new thing for me. Anyone have any words of advice or anything they want to say to talk me down off my ledge? I'm kind of frantic about everything right now, but I'm sure I'll feel better when a few more things that are up in the air are finally settled...

Fingers crossed that the house sells quickly!

I forget what the rule of thumb is for the amount of house you can afford? We gross about $250,000 together... I think a $4000,000 house isn't unreasonable?

[MonkeyMama]

Been there, done that. Some things to consider:

--I would absolutely avoid the bridge loan, ESPECIALLY if you have parents than can lend you money. The interest rates are high and penalties steep if you don't sell quickly. We were going to do one and out realtor really sat down with us and talked us out of it. VERY risky.

--I don't have a sob story in that we could easily afford both our homes, had a backup plan to rent first home (it rented for significantly more than our monthly costs), and we sold the place within 4 months so it never came to that.

BUT, what happened was the market tanked overnight, out of nowhere (9/11). I would not own two homes again without thinking about how I would feel if first home lost significant value of the course of a day or two. Was maybe a rare event, but it did come out of nowhere. & real estate is still pretty shaky these days. I personally don't think we have seen anywhere near rock bottom.

I think the best advice is to try to think through the WORST scenarios, no matter how unlikely, and have a plan for those scenarios. Guage the risk from that standpoint. People just tend to assume all will be rosy and don't consider reality. Doesn't mean you should never take a risk, but it is good to think it through. I do think having to borrow money for the costs of two homes is extraordinarily risky. What happens if it does take a year to sell??? How will you afford the first mortgage?

Beyond the two house thing, I really wouldn't rush into buying in NC. I'd at least wait to make sure the job was working out well and I liked living in the area, etc.

[Slug]

I live in NC and I agree with MM. You should have no rush to buy here. There are no areas here where prices are increasing at a substantial rate. Take Your Time. Get to know your co-workers and where they live and what they like about it. You're in a secure financial position. Take Your Time.

[nyliguy]

...until I do, I'll talk to you guys first!

My husband and I are moving to North Carolina. This happened VERY suddenly and with no preparation. I was offered a job out of the blue and I start in July. He will keep his current job and work from home.

This is our current plan -- I move down and rent an inexpensive apartment and start house hunting. He stays and prepares the house for sale. We are not planning on waiting until the current house sells before buying. It would be great if it did, but we're not going to wait for it. The old house is our starter home and we could swing two mortgages for a while if need be.

The old house is $1901 a month, including taxes, on the remainder of a 15 year mortgage. House is worth (hopefully) $270,000. We're looking to get a bigger house in preparation for a family, and we're looking in the $350,000 - $410,000 range. We'll get a 30 year on the new house, I think. Taxes are much lower where we're moving.

Now, we have about $65,000 that we could use for a down payment. We've got about $20k in a taxable account that's earmarked for retirement, but since the market has tanked I really don't want to pull anything out of that. Ditto all our Roth and 401k money. We have stopped making additional payments to the taxable account but are still on track to max everything out.

Now, my parents can loan us about $25,000 for carrying costs and expenses until the current house sells, but I'm not sure about getting a "bridge loan." As far as I understand, it's a loan to use toward your down payment that gets paid off when you sell your original house. I also seem to understand that you have to have equity in your current home, which we do. We owe about $200,000 on the house, so assuming we can get $260,000 for it, minus 6%, we'll get back about $45k.

So I think we'll be okay coming up with $80k for a down payment, and we'll eventually end up back with $30k in the bank.

But this is all kind of a new thing for me. Anyone have any words of advice or anything they want to say to talk me down off my ledge? I'm kind of frantic about everything right now, but I'm sure I'll feel better when a few more things that are up in the air are finally settled...

Fingers crossed that the house sells quickly!

I forget what the rule of thumb is for the amount of house you can afford? We gross about $250,000 together... I think a $4000,000 house isn't unreasonable?

$250K year and hitting up mom and dad for cash?

$250K year and only have $65k in savings? How can you make that much money and not have more in savings, and only have a small amount in retirement accounts and no investing accounts with a brokerage account that can be liquidated?

Hope you're in your 20's or just recently got to the $250k income and were much much less before.

At $250k year you should be in a much better situation.

[BuckyBadger]

$250K year and hitting up mom and dad for cash?

$250K year and only have $65k in savings? How can you make that much money and not have more in savings, and only have a small amount in retirement accounts and no investing accounts with a brokerage account that can be liquidated?

Hope you're in your 20's or just recently got to the $250k income and were much much less before.

At $250k year you should be in a much better situation.

I appreciate that you are posting this because I was negative on your wedding thread. If you care, you're welcome to look at my previous posts where I enumerate our retirement accounts, which total over $200,000. The $20,000 is in a TAXABLE account EARMARKED for retirement, and therefore what we could access without penalty. And, yes, we have only been making $250,000 for about two years. We went to graduate school and have Phd's. We are 32 years old. We put away ~$80,000 a year into retirement or retirement-earmarked accounts. How much are you putting away for retirement?

I'll stop voicing my opinion on your wedding thread since it seems to be making you very angry.

[nyliguy]

I appreciate that you are posting this because I was negative on your wedding thread. If you care, you're welcome to look at my previous posts where I enumerate our retirement accounts, which total over $200,000. The $20,000 is in a TAXABLE account EARMARKED for retirement, and therefore what we could access without penalty. And, yes, we have only been making $250,000 for about two years. We went to graduate school and have Phd's. We are 32 years old. We put away ~$80,000 a year into retirement or retirement-earmarked accounts. How much are you putting away for retirement?

I'll stop voicing my opinion on your wedding thread since it seems to be making you very angry.

Not angry, sorry maybe just my New Yorker ways and how they come across over the internet. I appreciate your comments on my post, and would never tell someone not to post negative stuff. I'm a big boy and can take critism regardless if I seem defensive

I was just shocked by only having $65k in cash when you earn that much income. It's good to have hefty retirement accounts, but you're sarificing worry now in order to be worry free when you're in your old age.

I'm impressed by the amount you save towards retirement never the less, as you can tell my life is in the stress of today spending on things I probably can't afford if I was plowing money into retirement instead.

[BuckyBadger]

Not angry, sorry maybe just my New Yorker ways and how they come across over the internet. I appreciate your comments on my post, and would never tell someone not to post negative stuff. I'm a big boy and can take critism regardless if I seem defensive

I was just shocked by only having $65k in cash when you earn that much income. It's good to have hefty retirement accounts, but you're sarificing worry now in order to be worry free when you're in your old age.

I'm impressed by the amount you save towards retirement never the less, as you can tell my life is in the stress of today spending on things I probably can't afford if I was plowing money into retirement instead.

I actually am amazed that I even have $65,000. I've been meaning to invest about $40,000 of it for a while, but I never got around to it.

If we have an emergency fund and enough money for whatever else we need on a regular basis and are saving for smaller purchases like vehicles and vacations, I don't see any point to having a lot of cash on hand. I'd rather it be in an account somewhere working hard for a (hopeful) early retirement.

The only thing that my plan does NOT account for is a completely unplanned for move 1000 miles across the country in two and a half weeks. Had we planned on this move, we could have backed off on our additional taxable contributions, tightened our budget, and put aside another $5,000+ a month toward planning for our move and we'd easily have enough for a full 20% down payment.

To everyone else -- I appreciate your comments. We're in no rush to buy. I'm hoping that everything can be sorted out in about 3 months. My husband has always wanted to move to NC and lived down there for a while, so he's raring to go!

[JoeP]

Why not continue to rent down there until the house up north sells? In the meantime, you can look for good neighborhoods, good schools, good commutes, etc. It sounds a bit like you're rushing into buying an expensive house.

[nyliguy]

I actually am amazed that I even have $65,000. I've been meaning to invest about $40,000 of it for a while, but I never got around to it.

If we have an emergency fund and enough money for whatever else we need on a regular basis and are saving for smaller purchases like vehicles and vacations, I don't see any point to having a lot of cash on hand. I'd rather it be in an account somewhere working hard for a (hopeful) early retirement.

The only thing that my plan does NOT account for is a completely unplanned for move 1000 miles across the country in two and a half weeks. Had we planned on this move, we could have backed off on our additional taxable contributions, tightened our budget, and put aside another $5,000+ a month toward planning for our move and we'd easily have enough for a full 20% down payment.

To everyone else -- I appreciate your comments. We're in no rush to buy. I'm hoping that everything can be sorted out in about 3 months. My husband has always wanted to move to NC and lived down there for a while, so he's raring to go!

fair enough, plus I'm sure you spent most of your twenties busting your hump and living below your means to pay for all that schooling with two of you earning so many degrees.

I think you'll do fine, even if you didn't have the 20% down and would quickly be able to pay down the mortgage and get the equity to eliminate any PMI.

[BuckyBadger]

Why not continue to rent down there until the house up north sells? In the meantime, you can look for good neighborhoods, good schools, good commutes, etc. It sounds a bit like you're rushing into buying an expensive house.

I actually agree with you. I'd like to rent for a while, but my husband only wants to move once. Shortsighted, perhaps, but he's got his heart set on it.

You're right, though. I should address the issue with him again. I think it really does make sense to wait until the house sells. It'll also give us a few more months to save up some money for expenses... I'm not sure how much luck I'll have, though!

[feh]

I actually agree with you. I'd like to rent for a while, but my husband only wants to move once. Shortsighted, perhaps, but he's got his heart set on it.

You're right, though. I should address the issue with him again. I think it really does make sense to wait until the house sells. It'll also give us a few more months to save up some money for expenses... I'm not sure how much luck I'll have, though!

I agree w/ JoeP. Rent in NC until the first house sells.

The bolded text troubles me; it seems you know what the prudent thing to do is. Listen to the accountant in your head.

[JoeP]

I actually agree with you. I'd like to rent for a while, but my husband only wants to move once. Shortsighted, perhaps, but he's got his heart set on it.

Wouldn't it suck to move "once" only to find out the location you picked and furnished, painted, landscaped, etc. wasn't what you were really looking for?

With an apartment, I'd argue you'd only move 1.2 times: bring in just the essentials (bed, couch, kitchen stuff, most clothes), and put the rest in storage until you find your optimal house. You could probably move your apartment yourself with a rental truck, and have the movers take from the storage.

[YLTL_Dan]

I actually agree with you. I'd like to rent for a while, but my husband only wants to move once. Shortsighted, perhaps, but he's got his heart set on it.

When we moved to New Orleans, we rented a furnished house monthly while we found a house to buy. Our situation was a little different because we weren't waiting on a house to sell, but we had all of our stuff in PODS and kept it there until we bought the house. This is somewhat risky because you won't have everything you need until you settle, but it's a great way to not move twice! It was also a great way for us to realize we had more crap than we needed .

[kv968]

This is our current plan -- I move down and rent an inexpensive apartment and start house hunting. He stays and prepares the house for sale. We are not planning on waiting until the current house sells before buying. It would be great if it did, but we're not going to wait for it. The old house is our starter home and we could swing two mortgages for a while if need be.

I'm with the "rent until you sell crowd". I know your husband is raring to go and doesn't want to move twice but what concerns me also is you swinging two mortgages "for a while". What's "a while"?

I don't know how the real estate market is where you're currently at but you can't be sure that you can sell the place that quickly. And what happens when "a while" starts to run out and you haven't sold the home? Do you start borrowing more money or do you start seriously compromising on your selling price just to get it sold?

Not to be negative on the situation but to me with renting you get to check out various places to live before buying, aren't feeling pressured to sell the house and get to check out your new job. Who knows if you'll even like that?

I just wouldn't plant the stakes with everything happening so quickly when you can rent for awhile and take time to work things out.

[LivingAlmostLarge]

Does your husband work from home now? How will that affect the sort of home he might want to buy? If he doesn't work from home now, is he sure he'll like telecommuting or his job will continue to let him?

Will it affect your decision to buy a home if he were to switch jobs? Would he take a paycut? Would you move from NC? Are you moving closer to family? Do you think you'll want to stay at home with kids for a bit like 1 year or switch to part-time? Will that affect your income drastically?

I think some of these things can't be predicted but perhaps renting and selling the house first would allow you time to think through different scenarios.