Just torn between NICE and FREEDOM

[syracusa]

Option 3, buy crummy home in area A for less money. Pay off house faster then quit job. Seems like you want your cake and eat it to so that's an answer.

Kind of...I admit that, and it's very frustrating because I don't like any of the compromises I would have to make in both situations.

Buy a home that needs work and do work slowly but live in a house that is livable in the location you want then quit your job you don't like.

First, let me say that this is not a job "I don't like". There is nothing else I would like doing better as far as paid work goes. This is the only thing I can actually stand doing and it is exactly because I like it that I have managed to do it full-time for so long. It is the "full-time" thing I don't want, even less so the "full-time" of ANY other job. I simply want to have extra-time in my hands to allocate to household, children, or simply to a bit of leisure (breath time/"me" time). For example, time to exercise? This for me sounds like a good joke.

I just simply don't want to work so much in paid employment, no matter how wonderful the content of the job is. Full-time employment nowadays spells large workloads. They give you more to do and faster, including the workload of those they should hire in addition yet they don't. There are always unwritten/tacit expectations of over-time.

Regarding "lesser house" in nice A area, I know this is probably what we should be doing; but this is where our weakness kicks in - which has to do with perceived "ugliness" of the house. We should probably do option A with "ugly" house, in "lower-end" neighborhood. Many of these houses are so-called "ugly" not because they are not fixed up or updated (many are) but because their architecture was very unappealing in the first place, even when they were new. The curb appeal is terrible, they tend to have very low ceilings, they are dark and quite cubic on the inside...and just don't project an overall sense of enjoyment about what you live in everyday.
I know this is entirely psychological and it's probably the part where something would have to give.
We just can't quite make ourselves do it...but in the end, we might.

My husband suggested a theory that is probably not pleasant to hear or admit to ...but he believes we instinctively/subconsciously insist on landing in a neighborhood with a population we can relate to in general terms, which would be professional types. I am perfectly aware that you can have wonderful neighbors and horrible neighbors in ALL kinds of neighborhoods and from all walks of life, it simply has to do with luck. But somehow, people seem to gravitate towards those with preoccupations and backgrounds like themselves and my husband is afraid we are doing the same thing here.
Trouble is that professionals in area A tend to live in neighborhoods where the least expensive house is 350,000, at the very minimum. Interestingly enough, according to some of my friends and colleagues, many professional types live in 200,000-300,000 neighborhoods in area B. My husband says that these are people who want the status of having a "nice", bright house with curb appeal and the jazz to project their "professional" status, yet they are in occupations that do not bring that much money to afford A - so they run to area B to get the niceness and maintain the "white collar" status, even if it's 'out there".
By contrast, people in lower-end houses in area A do not mind the more rugged-y, rustic look of those houses because everyone in their walk of life lives that way too (non-professionals) so they feel comfortable this way.
This is just a theory my husband came up with...but I am not sure whether this is really what is going on.

My theory is that I cannot stand those houses because they are too low and dark and I grew up on a different continent where even modest dwellings had higher ceilings and large, bright windows. I don't know.

Honestly though if household salary is $170k and $120k is one income = $50k, with two kids how much do you bring home really? What do you net after everything? But your kids are probably older and you don't have to pay for childcare or anything right? And if the $120k breadwinner ios able ot focus on working and no time off for kids, no distractions, perhaps they can make up the $50k in income faster.

Just a suggestion. $50k - SS, Medicare, Federal, State taxes, child care, extras how much do you really bring home.

My husband makes 100,000, I make 70,000 and I also bring home an excellent health insurance for the whole family, which he wouldn't be able to do (what he could do would be much worse), plus retirement savings. So my full-time salary DOES make a huge difference in our family, including providing a safety net for my husband's job, which can always go.
When I talked about quitting, I didn't mean quitting working altogether. I will probably always work part-time. There is a very big difference in my line of work between part-time and full-time. You do not get to make 50% of full-time when you work part-time. :-)
So if you make 70,000 full-time...you're not going to make 35,000 part-time. That would be a dream. You will make misery, more like pocket money. I would be making 15,000 - maybe 20,000 at best.

We also do not pay a lot for childcare apart from 300 a month for my daughter's preschool.
In a year she will be in K though, so that expense will go too.

I really don't understand the need to be rid of every last penny of debt as fast as humanly possible. Sure, debt sucks, but clearly your income allows even option A to be easily affordable.

Sure it's easily affordable on paper, even option A; but don't forget both of us are exhausted most of the times because we go full-speed from morning to evening between paid work and family/household responsibilities.
9 pm is "crawl-to-the-couch" time only so we can start the hamster wheel all over again the next morning.
Hard work is truly over-rated. :-)

[Petunia 100]

Just keep renting until you find a house you like in an area you would like to live. Compromise too much and you'll likely be unhappy with your choice.

[riverwed070707]

I would choose option A. You pay more for location becuase its what makes a neighborhood enjoyable and liveable. Its worth the extra and you can afford it just fine on your income whether you are FT or PT.

[lorraineb]

What about looking at an alternative type of house in the more desirable area where you might be able to rent out rooms / living space to help cover the cost of the mortgage? With the good school system, finding renters should be easy, although that does mean a commitment on your part -- but with one person working at home, it should be easier to keep tabs on the renters.

[snafu]

can offer

Another vote for 'A.' You may as well be happy and location, location, location is the number one mantra of real estate. Just because it has a particular 'asking' price - that is not necessarily the 'selling' price. Iff you've never done this before...You can offer whatever is reasonable depending on what has sold per sf in that specific community. You can ask your agent to prepare a detailed analysis to avoid insulting the seller. Keep in mind that realtors commission is based on selling price so they have a vested interest in staying close to asking. I don't think everyone is aware that commissions can be negotiated - a bit. Even when you make an offer that is not accepted, you can negotiate repeatedly until both buyer and seller are satisfied. At this point you can negotiate mortgage rates and even closing fees.

[humandraydel]

Well, as you have it laid out, I would go with option B because I value that freedom so much. That being said, your numbers seem a little off to me (but it's hard to know exactly because you never said the prices of the house). I'm just surprised that house B you could pay off in 5 years, but if you add another $90k it would take you 10 additional years? Especially with your high income, I would expect that you could pay off $90k in an additional 3-4 years if you really try?

[feh]

I don't want to run the numbers, but I'd say if option A doesn't break the 28/36 rule, go with that.

Good schools and living in an area you enjoy are important aspects of a home purchase.

[phantom]

Personally, house B sounds like my kind of place, so I'd take that one in a heartbeat. But, if I shared your distaste for that kind of area, I'd probably have to go with option A or a less expensive house in the same area.

I wonder if it's at all possible to try renting a place in area B for a while? Find out if it's really as much of a pain as you think it is to live a little farther from an urban area. Find out how much of a step down the schools really are and how much that step really impacts your kids. Ultimately, only you and your family are going to be able to decide what you value the most. But, I get the impression that part of the reason you're struggling to decide is that you're not entirely sure what option B would be like.

[Like2Plan]

I think DH and I are in the "B" category. We picked our home location as a central location to our jobs in a good school district. When we first moved here, my job was about an hour west and DH's job was about 30-45mins east of our home. Our price range was low enough that we could easily manage the mortgage on one income. Over 27 years and many jobs, the central location worked well for us.

Even though our mortgage is paid off at this point, it costs money to live in our home. We still have property taxes, homeowners insurance, utilities and upkeep. I would expect a more expensive home to have higher overhead especially for property taxes and homeowners insurance. It is another reason I am glad that we have a fairly small home.

No traffic considerations for any of us. I do go away to a workplace, but only a couple of times a week, at non-rush hours; and even when it is during rush-hours, I go against the traffic. Husband always works from home.

If one or the other of you had to commute somewhere and "A" was closer, then I could see a reason to go with "A", but that doesn't seem to be the case here. It seems like you have a choice to live wherever you hearts desire without having a horrible commute.

[syracusa]

What about looking at an alternative type of house in the more desirable area where you might be able to rent out rooms / living space to help cover the cost of the mortgage? With the good school system, finding renters should be easy, although that does mean a commitment on your part -- but with one person working at home, it should be easier to keep tabs on the renters.

We thought about that but someone who wanted this area for schools would have children and would definitely need to rent a completely separate house as opposed to a finished basement with a bathroom in our house. Maybe a sole renter, once in a while...but you cannot really rely on that as a constant source of income.

[syracusa]

Well, as you have it laid out, I would go with option B because I value that freedom so much. That being said, your numbers seem a little off to me (but it's hard to know exactly because you never said the prices of the house). I'm just surprised that house B you could pay off in 5 years, but if you add another $90k it would take you 10 additional years? Especially with your high income, I would expect that you could pay off $90k in an additional 3-4 years if you really try?

I did give prices, but further down, not in the OP.

Option A: 350,000-360,000
Option B: 240,000-260,000

We would put 100,000 down in either case.

The reason why I said we could pay B off in 3-4 years is because I know for sure I will be able to keep my full-time job at least 3-4 years from now. After that, there is a possibility it might go.
With Option A, the house would obviously not be paid off in 3-4 years, and if I am forced to switch to part-time after 4 years (very poorly paid), the rate of paying down on the house would slow significantly; so it could take much, much longer.

[syracusa]

I don't want to run the numbers, but I'd say if option A doesn't break the 28/36 rule, go with that.

Good schools and living in an area you enjoy are important aspects of a home purchase.

What exactly is the 28/36 rule again?
My husband thinks we could stay "very responsible" even at a 350,000 price with me part-time - assuming, of course, his job continues without a problem; but then again, it would still mean having a mortgage many years ahead. Not exactly "freedom". Just "still affordable".

[syracusa]

Personally, house B sounds like my kind of place, so I'd take that one in a heartbeat. But, if I shared your distaste for that kind of area, I'd probably have to go with option A or a less expensive house in the same area.

I wonder if it's at all possible to try renting a place in area B for a while?

No - we can't play "renting all over" anymore. We have been renting in Area A for the past two years, our older one is already in elementary school, he loves the school, and we just need to settle in a place. We can't use these kids as Guinea Pigs for a study on our ability to "stand" various areas. Besides, in area A it is already a seller's market - it's as if the recession and the housing market problems had never happened around here.
When a house that is in good shape and meets most general criteria of desirability shows up, it's gone over the week-end. Plus the prices are already starting to move up. So we need to buy and finally stay put. We've moved a lot over the past five years and this needs to stop soon.

Find out if it's really as much of a pain as you think it is to live a little farther from an urban area...But, I get the impression that part of the reason you're struggling to decide is that you're not entirely sure what option B would be like.

I have experienced this before, in another state, and it is painful enough to me. It literaly leaves me frustrated. Funnily enough, even living in area A, which is close to amenities and the metro, and a generally "spiffy" area ...even this feels bland and blah to me at times simply becauise it is still suburban living. My ideal kind of living would be in a lively urban area, with tons of public spaces, cafes, parks, plazas, tourism and life (in a nut shell, that's called Europe :-)))) - but since this is not an option - then "reasonably close to something" and "close to amenities" is as good as it gets.

Another thing I hate terribly is to spend a lot of time in the car driving just to get a little something I forgot to buy or just to get out somewhere that has a sense of "place". I already am quite inactive and don't usually have time to exercise, if I spend even more time in the car by living in "no man's land", it would probably be pretty bad.

That being said, having no debts, no pressures to do a monthly payment on anything and no financial obligations towards anybody other than your family's stomach - that's a pretty amazing thing no matter how you cut it.

When some say "they hate us for our freedom!" :-), this is what they should mean by freedom, because it is indeed a darn enviable thing to be able to live this way.
But this is not what they mean because most of us are far from such freedom.
So they must hate us for something else. :-))))))))))))

[feh]

What exactly is the 28/36 rule again?
My husband thinks we could stay "very responsible" even at a 350,000 price with me part-time - assuming, of course, his job continues without a problem; but then again, it would still mean having a mortgage many years ahead. Not exactly "freedom". Just "still affordable".

Mortgage payment shouldn't be more than 28% of net or 36% of gross. Clearly you should use income numbers from when you think you'll be working less.

[Baby_nurse]

Personally, I like the idea of financial freedom a whole lot more than the niceties.