Is your housing cost 25% or less of your take home pay on a 15 year loan?

[DawnM]

Well, maybe that is part of the problem. Ours were all potty trained in our Los Angeles home where we would have been arrested for allowing that sort of thing!

Dawn

Sorry, you made me laugh! Piss off the porch kind of guy? That's how mine got potty trained.

 

[Lucky4me]

If I were you, I'd stick it out. Cut back everywhere else you can and keep that property. It sounds as if you have enough time to earn more money, build equity on the property and you love where you are.


Our situation was completely opposite of yours.
We decided years ago to stay in our small (ish) home on a 15 year loan. A house I've hated since the day we moved in. We've paid extra each year and it's almost paid off. I don't think mortgage, taxes and insurance was even 10% of our income at the time. We started looking at homes twice the cost of ours and were so tempted. It was really our kids who talked us into staying. They loved the neighborhood, school and friends. So we stayed.

Two years ago, dh got brain cancer. We are so glad we didn't move on up when we had the chance. We had to use a good chunk of our savings and investments on medical bills and travel expenses for his treatment. We were able to leave our mortgage and 401k alone. So now although he took a very early retirement and things are tight, he is in remission and things are looking bright for our future. If we were living with a higher mortgage, higher taxes, etc. we'd be so much worse off right now. We'd probably be in an apartment.

Good luck with all this, but I agree with your husband!

 

[ruadisneyfan2]

If I were you, I'd stick it out. Cut back everywhere else you can and keep that property. It sounds as if you have enough time to earn more money, build equity on the property and you love where you are.


Our situation was completely opposite of yours.
We decided years ago to stay in our small (ish) home on a 15 year loan. A house I've hated since the day we moved in. We've paid extra each year and it's almost paid off. I don't think mortgage, taxes and insurance was even 10% of our income at the time. We started looking at homes twice the cost of ours and were so tempted. It was really our kids who talked us into staying. They loved the neighborhood, school and friends. So we stayed.

Two years ago, dh got brain cancer. We are so glad we didn't move on up when we had the chance. We had to use a good chunk of our savings and investments on medical bills and travel expenses for his treatment. We were able to leave our mortgage and 401k alone. So now although he took a very early retirement and things are tight, he is in remission and things are looking bright for our future. If we were living with a higher mortgage, higher taxes, etc. we'd be so much worse off right now. We'd probably be in an apartment.

Good luck with all this, but I agree with your husband!

Best wishes for you dh staying healthy!!

 

[ChrisinNJ]

My property taxes alone are nearly 25% of my hubby's take home. But then I live in NJ the "Tax Me" state.

 

[StitchBuddy]

Personal opinion, stay where you are. By the time you pay realtor fees you won't be that much better off. Unless you are drastically down-sizing. My friend thought about doing this and found out that refinancing the house was a better option.

 

[DawnM]

Well, I think you are the last ones to stlil live in NJ, the rest of your state has already moved to NC!

Dawn

My property taxes alone are nearly 25% of my hubby's take home. But then I live in NJ the "Tax Me" state.

 

[ChrisinNJ]

Well, I think you are the last ones to stlil live in NJ, the rest of your state has already moved to NC!

Dawn

Yeah well, save some space for us, hubby retires in 8 years

 

[DawnM]

Oh my goodness. Sorry you had to go through all of that. Glad he is doing better.

Dawn

If I were you, I'd stick it out. Cut back everywhere else you can and keep that property. It sounds as if you have enough time to earn more money, build equity on the property and you love where you are.


Our situation was completely opposite of yours.
We decided years ago to stay in our small (ish) home on a 15 year loan. A house I've hated since the day we moved in. We've paid extra each year and it's almost paid off. I don't think mortgage, taxes and insurance was even 10% of our income at the time. We started looking at homes twice the cost of ours and were so tempted. It was really our kids who talked us into staying. They loved the neighborhood, school and friends. So we stayed.

Two years ago, dh got brain cancer. We are so glad we didn't move on up when we had the chance. We had to use a good chunk of our savings and investments on medical bills and travel expenses for his treatment. We were able to leave our mortgage and 401k alone. So now although he took a very early retirement and things are tight, he is in remission and things are looking bright for our future. If we were living with a higher mortgage, higher taxes, etc. we'd be so much worse off right now. We'd probably be in an apartment.

Good luck with all this, but I agree with your husband!

 

[DawnM]

Well, I know we hit our quota for NJ folks allowed in to NC sometime in August this year, but hopefully they will open up more slots by then. JK!

Dawn

Yeah well, save some space for us, hubby retires in 8 years

 

[graygables]

Our house in Ohio is on the 15 year plan, due to be paid off in 3 more years. It was a family home, though, so we got it for a very reasonable price. We toyed with the 30 year, but pay at 15 rate thing, but decided we'd be too tempted to just pay the minimum. It was a good call. My husband is like yours, he wants his space and there would be no moving him to a "neighborhood". This is one of the main reasons he is in Ohio and I am in Florida.

Here, I'm renting as I'm not interested in "single mother" home ownership...I like pushing it off on the landlord. I am so out of the acceptable range for housing costs, I don't even want to think about it. It's central Florida! I am getting ready to face a downsizing decision next year, though, when I believe oldest DD will finally think she knows it all and ditches us, leaving me with an extra bedroom and $300/mo short on rent. Talking it over with several people, I think I've decided it's worth $300/month to not have to pack up, load up, and move with all the related expenses (deposits, rental truck, strong men, time lost, frustration, etc). I've moved 35 times in my life (3 in the last 20 months) and I'm ready to sit tight for a bit. The "opportunity costs" are worth it to me more than the $3600/year.

 

[horseshowmom]

Based on the facts you presented - quality of location, husband's preferences, the fact that your family really likes your house, the current market, and most importantly the fact that you are getting by fine with things as they are, I would stop worrying about it and just keep on doing what you're doing.

Of course, in the interest of full disclosure I have to admit that my husband and I are in your husband's camp. There's no way that I would live in a subdivision. Somebody would be complaining about our horses the first day!

 

[MrsPete]

I think that the 25% on a 15 year is a really good thing to shoot for, but sometimes in certain parts of the country, it's really tough to meet that.

I think it's more than our expectations concerning houses have risen sharply in the last 20-30 years: My grandparents and my husband's grandparents raised families in houses that'd be considered tiny today (they had their children in the 1940s). I was raised in a house that had no air conditioning, and all the children shared bedrooms.

Yet today an average middle class house is considerably larger, has a garage, probably a living room and a family room (or a sunroom or some other living space), more expensive finishes, etc. If we were to scale back to more basic houses, they'd fit into the 25% range and other financial woes (retirement and college savings) would disappear or at least be diminished.

We want a whole lot more today, but that doesn't mean our salaries can withstand those wants.

I love the ratio that Elizabeth Warren puts forward in her last book.

50% of your net income goes towards "Must Haves" in your budget. That's mortgage/rent, food, utilities, insurance, reasonable transportation and clothing.

30% should go towards "wants"....basically, discretionary spending....everything from piano lessons to vacations to eating out.

That leaves 20% for savings, 15% of which should go towards retirement....the other 5% can be for anything from college savings for the kids, to saving up for that vacation home down the road.

I like that as well, and I think the "must haves" are where most people with budget problems go wrong. They want THIS HOUSE, and their income allows it, so they buy it without considering much its impact on the rest of their budget. Ditto for THE CAR . . . and then there's just not enough "left over" for the wants and savings.

The truth is that those wants and savings should never have been treated as "left over". They should've been included in the plans from the get-go.

 

[LovableGluttons]

OP, the looming college and retirement costs would make me worry about housing costs too.

Have you looked into costs for four years of college at local schools?

Have you run the numbers for your retirement savings?

Each of us has our own ideas about financial security and personal wealth.

If the amount of your housing costs is causing you to worry, then it isn't a comfortable amount for you, no matter the percentage.

I have hang ups about owing money through loans, even temporary borrowing through credit cards to earn rewards. I do get that those things don't cause others worry, but they do cause me great stress.

If getting a mortgage under a certain monthly cost is the key to your peace, then that should be the goal here.

 

[eliza61]

I think it's more than our expectations concerning houses have risen sharply in the last 20-30 years: My grandparents and my husband's grandparents raised families in houses that'd be considered tiny today (they had their children in the 1940s). I was raised in a house that had no air conditioning, and all the children shared bedrooms.

Yet today an average middle class house is considerably larger, has a garage, probably a living room and a family room (or a sunroom or some other living space), more expensive finishes, etc. If we were to scale back to more basic houses, they'd fit into the 25% range and other financial woes (retirement and college savings) would disappear or at least be diminished.



The truth is that those wants and savings should never have been treated as "left over". They should've been included in the plans from the get-go.

I don't know MrsPete, like you I grew up in a tiny NYC apartment with 6 other people and no air, no place to play, no grass. I was miserable. I mean I was blessed because I had a loving family but would I want my kids to grow up like that? Would I want 4 kids sharing 1 bedroom to bring my mortgage down to 25%? No way. (disser, I am not saying this is a bad thing so please do flame me screaming that it is insenstive. , this is simply my opinion) So I don't know if I would scale back simply to fit into some preconcieved percentile.
It's sort of like what you said about how our grandparents saved back in the day, so in the defense of the houses today, just because our parents lived that way doesn't necessarily mean it's ideal.

We tried to find a balance. Our first house was a 2 bedroom townhome. mortgage was $570 bucks. had we stayed there it would have been paid off but with 3 kids and 1 dog, a tineey tiny kitchen, I would have been less than a happy camper.

So my constant struggle is how to find a balance of enjoying my life now while also planning for retirement. while it's true I know a few people who made some questionable money calls, I know just as many senior citizens who are now regretting never taking that trip to Europe or buying that new car.

 

[MrsPete]

I don't know MrsPete, like you I grew up in a tiny NYC apartment with 6 other people and no air, no place to play, no grass . . . Would I want 4 kids sharing 1 bedroom to bring my mortgage down to 25%?

I grew up on a farm in the South -- family of seven, three bedrooms. Everyone shared, but we weren't super-cramped.

Yeah, four kids in one bedroom is too much. I'm talking about putting two kids in a bedroom, buying a house that doesn't have a garage, choosing a house with just one living area (instead of a living room and a den/media room/ or office). You took my comment (that we're spending more on housing because we're buying so much more than previous generations did) and stretched it farther than I intended. Lots of ideas are good in moderation, bad when taken to an extreme.

You're right that it's the balance that matters . . . but no matter what, if you spend more on housing than you really should, it's going to have to come out of some other part of the budget. Splurging on a vacation (or similar) that's a financial stretch may mean sacraficing temporarily . . . but splurging beyond your limits on a house means adopting a "less in other areas" lifestyle, and that's going to be tough.

If you live in an area where housing is expensive, the obvious "balances" are choosing a smaller house, or a fixer-upper that you can get into cheaply, or moving farther out and spending more time in the car.

 

[DawnM]

Retirement is a non-negotiable. It is well funded monthly and we will not lower that unless we actually have no job and no alternatives. Numbers are run but even though DH is comfortable with it, I would like to save even MORE!

Yes, we have run the college numbers. Current costs are $5K per year for tuition and then probably another 2K or so for books and fees.

Dawn

OP, the looming college and retirement costs would make me worry about housing costs too.

Have you looked into costs for four years of college at local schools?

Have you run the numbers for your retirement savings?

Each of us has our own ideas about financial security and personal wealth.

If the amount of your housing costs is causing you to worry, then it isn't a comfortable amount for you, no matter the percentage.

I have hang ups about owing money through loans, even temporary borrowing through credit cards to earn rewards. I do get that those things don't cause others worry, but they do cause me great stress.

If getting a mortgage under a certain monthly cost is the key to your peace, then that should be the goal here.

 

[ruadisneyfan2]

I don't know MrsPete, like you I grew up in a tiny NYC apartment with 6 other people and no air, no place to play, no grass. I was miserable. I mean I was blessed because I had a loving family but would I want my kids to grow up like that? Would I want 4 kids sharing 1 bedroom to bring my mortgage down to 25%? No way. (disser, I am not saying this is a bad thing so please do flame me screaming that it is insenstive. , this is simply my opinion) So I don't know if I would scale back simply to fit into some preconcieved percentile.
It's sort of like what you said about how our grandparents saved back in the day, so in the defense of the houses today, just because our parents lived that way doesn't necessarily mean it's ideal.

We tried to find a balance. Our first house was a 2 bedroom townhome. mortgage was $570 bucks. had we stayed there it would have been paid off but with 3 kids and 1 dog, a tineey tiny kitchen, I would have been less than a happy camper.

So my constant struggle is how to find a balance of enjoying my life now while also planning for retirement. while it's true I know a few people who made some questionable money calls, I know just as many senior citizens who are now regretting never taking that trip to Europe or buying that new car.

This part made me laugh. It reminded me of when I had to go back to work after have our 1st child and my grandmom said, "You kids nowadays want everything. Of course you had to have the power windows in your car too."
Back in the day, that was a huge upgrade. I try to tell her that comes standard in cars today but she thinks we're all too spoiled. Ds13 & ds10 once saw a classic car in a parking lot with crank window knobs and the old swing out vent window and were amazed at the sight of it.
In her 93 years she sure has seen a huge change in the world.