by Sara S
Welp, we finally moved last week.
If you remember, we started to think about moving back in January (before the world imploded). We were ready to move by our business, live in a safer area, and get our oldest settled before middle school. We were debating the different merits of buying vs. renting. I asked what you would do, and I was grateful for the BAD community members that weighed in and shared their opinions.
Most of you were Team Rent: sell our current house, and then rent, pay off our debt, save up for a down payment, and then buy.
Very few were Team Buy: take advantage of low rates and plan to settle in somewhere long term while still attacking our debt.
Initially, I wanted to rent and put a dent in our student loans. But as we reasoned it out, we ended up on Team Buy. The story of how it all finally came together is long, and COVID-y and I’ll tell it another day. But I wanted to explain our thinking as we considered buying vs. renting.
We could buy and make about $150,000 from the sale.
- We could put all that money towards our student loans, taking them from $280,000 down to $130,000.
- We wouldn’t have to worry about property taxes, HOAs, or home upkeep.
- At $130,000 of student loans, we would have about four years until pay off. And then it could take us maybe another four years to save up for a 20% down payment (on a $550,000 house, a moderate home in this area). By this time, our oldest would be moved out and our other two kids in high school.
- Rent in this area is rougher than I first thought—more like $2300/month and climbing for a small home. We could have gotten an apartment for less, but that’s a not what we wanted for our family of five for the next 8 years.
- We could have to move again thanks to the unpredictability of renting—switching schools and neighborhoods—missing out on the stability we are trying to give our kids.
We could buy and put about $150,000 down on our next home.
- We would be able to stay in the same neighborhood and schools for the next several years.
- We’d get to stay right by our business in the community we choose.
- We got one of today’s crazy low interest rates (2.875%)
- We can gain equity in this home in a well-liked community with good schools.
- The house needs work that we are capable of doing and that can increase the value of the home.
- Our student loans will take longer to pay off. Instead of four years, it could take up to 13 years. (But we ain’t gonna let it take that long.)
- We are now responsible for property taxes, HOA fees, and home upkeep.
So we bought another home. We are planning to put part of the proceeds from our sale towards our student loans, so there is that. I know this may not be a popular decision here, but it’s what we felt good about!