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azboy73
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My wife and I are currently in debt up to ears, not by choice, by necessity. We are currently at odds trying to come to an agreement that is having dire effects on our marriage and quality of family life. My question I will pose first and give details that may help. Is it the best move to sell our home or continue in our home and try to pay off what we can.
We currently have over $80k in equity in our home and it is not in the best of neighborhoods and we have no backyard. I have pre-qualified for an amount that would get us into another home and use my VA benefits to purchase. I am working a lot of OT and my wife has 2 jobs that give us about 2 nights a week to see each other. We have 6 kids that are dying for our time. I also work about 65 miiles one way from home currently and the wear and tear on my vehicle is astounding. Obviously, I want to sell and move closer to work and if we sold our home, we would be debt free but with a higher house payment for a total plus of about $900 per month extra. Her primary job is as a stay at home daycare provider and it would be tough at first for her to start over in a further area. Refinancing to us is an option, but the home is currently in her name only and her credit score is below 600. Mine is above 700 and would be the primary if not only borrower on the new loan.
What advice could anyone give to better our situation? She states that no financial advisor would advise to sell our home and have our payment jump up about $600...but we would be saving over $1500 by paying everything off and building a savings to take care of emergencies. To me, more time as a family and saving in an emergency fund and being closer to work seem like a wise choice. Am I missing something? Thank you in advance!!
Post Mon Jun 27, 2016 5:13 pm
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oldguy
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quote:
and have our payment jump up about $600.


The $600/m equates to an extra $125,000. Do you need that much more house?

quote:
but we would be saving over $1500 by paying everything off


When you say 'saving' - is that a one-time savings of $1500? Or $1500/year? Or per month?

There aren't many places in Phoenix where you would be 65 miles from work? How did that come about? Can you transfer to a closer location?

As for using the VA benefits - I had a VA loan once, IMO the benefits weren't much, my conventional loans since then have been better. I've had to pay a 3% down, or a 5% down, one time a 10% down - but the rates were always better with conventional loans. So always do the math before you sign. (And it's always a pain to SELL a VA house.)
Post Mon Jun 27, 2016 5:39 pm
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azboy73
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Sorry I was not more specific, thank you for the reply...
For a minimum 5 BR home in the Phoenix or Anthem area yes we would need that much home ($265k max). We are currently in Maricopa and my job is off Happy Valley Rd and I17.

We would be saving $1500/mo after all things are paid off, and netting about $900 saving per month including extra $600 house payment.

The VA loan would allow us to get in with no down payment and have everything paid off with about $5-$10k left over for moving costs and move-in costs (curtains, etc.) and the rest would start our emergency fund.

quote:
Originally posted by oldguy
quote:
and have our payment jump up about $600.


The $600/m equates to an extra $125,000. Do you need that much more house?

quote:
but we would be saving over $1500 by paying everything off


When you say 'saving' - is that a one-time savings of $1500? Or $1500/year? Or per month?

There aren't many places in Phoenix where you would be 65 miles from work? How did that come about? Can you transfer to a closer location?

As for using the VA benefits - I had a VA loan once, IMO the benefits weren't much, my conventional loans since then have been better. I've had to pay a 3% down, or a 5% down, one time a 10% down - but the rates were always better with conventional loans. So always do the math before you sign. (And it's always a pain to SELL a VA house.)
Post Mon Jun 27, 2016 6:02 pm
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oldguy
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Yeah, Maricopa to Anthem is about as extreme as you can get and still be in the Valley - lol.

I would avoid jumping straight into a huge 5-bdrm in an elite area on your first jump. There are about 2 million mid-size houses between your two extremes. And if you look at history, you'll see that, before the McMansion craze of the most recent decade, most families lived & prospered in 3 & 4 bdrm houses smaller that 2000 ft. (I'm in a Morman area, 7 or 8 kids is common). And consider the end-game, in just a few years Child #1 will be moving to a dorm or apt. Followed by #2 a couple yrs later. In a surprisingly short time, you and DW will be empty nesters. - you won't want 3000 feet and 5 bdrms.

More importantly, if you go the pricey route, your family can never build wealth. No ability to help the kids with college, cars, weddings, etc.
But if you invested $5000 per yr into your 401k for 30 yrs without interruption (and used the generic 11%/yr index) you would have about a million dollars. (Which isn't as big as it sounds 30 yrs from now).
Post Mon Jun 27, 2016 8:59 pm
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azboy73
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Thank you Oldguy. Good advice.
Post Mon Jun 27, 2016 9:50 pm
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