When Is It Worth It To Get Back Into Debt?

THIS POST MAY CONTAIN AFFILIATE LINKS. PLEASE READ MY DISCLOSURE FOR MORE INFO.

 

Something I have been struggling with over the past couple of months is whether or not to go back into debt.  As most of you know, my wife and I paid off our mortgage shortly after we got married in 2012.  It’s been an amazing run of not making a monthly mortgage payment.

 

year in review raise child without debtWe’ve been able to super-size our retirement over these last five years, which has put us on a path to retire early.  Most of you also know that I am a huge nerd.  I have been tracking my finances for years.  My financial spreadsheet at the end of 2007 shows that I had $32,500 saved up for retirement at that point.

 

Needless to say, compound interest has been our friend.  Our retirement has ballooned well beyond $32,500.  For that matter, since 2012, our retirement account has increased by five times.  If that doesn’t convince you to pay off your mortgage, I’m not sure what would.  Clearly saving for retirement without a mortgage, plus a bull stock market, can really accelerate things.

 

Striving for Early Retirement

back into debtWhen I was younger, I was doing everything I could in order to retire as quickly as possible.  However, the push to retire early isn’t nearly as strong as it once was, now that children are involved.

 

Before, early retirement meant the freedom and ability to travel the world and be carefree.  Well, parenthood slapped me in the face, as that is no longer realistic.

 

Realities of Early Retirement

back into debtEarly retirement, at this point, would most likely include changing dirty diapers and rocking little ones to sleep.  While people told us that babies are moldable and travel easily, we just haven’t had that as our personal experience.

 

Of course, I know and would appreciate being at home with the kids if I was to retire early.  But they would be in school most of the day anyways, so it’s hard to envision life like that.  I could also pick up another hobby, but I just don’t know what that would be at the moment.  My wife also doesn’t love the thought of me just hanging out around the house all day.  Being a bum is very unattractive to her 🙂

 

While I haven’t quite figured out a hobby, I do enjoy blogging and hope I am able to continue writing and interacting with readers.

 

Growing Our Family

back into debtSomething we didn’t realize before having kids is that my wife loves being a mother and even being pregnant.  While she has some rough days when she isn’t quite feeling right, for the most part she tries to enjoy every second of both pregnancy and motherhood.

 

So based on that (and that children are gifts), we may continue to have more kids in the future.  This means that we probably would not be able to do the amount of travel that I’d like.  Sure, we could ask grandma and grandpa to watch our kids, so we could travel alone.  But I’m not sure they’d want to be responsible for more than 2 kids at a time!  I guess we’ll have to figure that out when we get there.

 

Needing More Space

back into debtWe have been heavily considering moving out west so that we can get a more spacious house without breaking the bank.  Although houses out there are more affordable, they still definitely aren’t cheap.  So most likely, we would have to take out a mortgage at that point.

 

Recently, we have been trying to zero in on neighborhoods that we like, in hopes of finding a home where we could mimic resort-style living.  For instance, we had found a home online that appeared magnificent.  It had an indoor pool, along with a movie theater, and some other luxurious amenities.  We just visited it in person this past weekend.  The home was a train-wreck.  It probably needed $200,000 worth of improvements, at least.  The floor upstairs seemed slightly sloped in certain areas, and we were pretty sure that wasn’t an intentional feature.  I wish I had brought a marble to verify.  Needless to say, the place needed a lot of TLC, and I was very disappointed!

 

back into debtAnyways, the main reason why my heart is still set on a pool and resort-style living is because I’m not sure when we will ever be able to travel to the Caribbean due to Zika.  So I’m hoping to bring some of the Caribbean to us.  

 

A while back, I had written about my dream to have a home with a pool.  I received some excellent feedback from many of you saying N-O to my pool dream.  BUT… The allure of an indoor pool that could be used year-round is awfully appealing to me.  Plus, having a hot tub to soak my sore body after completing a rigorous exercise routine sounds amazing.

 

Delaying FIRE

So with all that said, in order to afford our dream home, we would have to take on a mortgage that would probably push back FIRE by at least five years, or even ten years depending on the market’s behavior.

 

I know some of you may be thinking… Why not wait five years, reach FIRE, then move somewhere much cheaper such that a mortgage would not be necessary?

 

Married to the Area

back into debtThat’s a great idea.  Except, ALL of my family lives in the area.  My parents live 10 minutes east of me, my sister lives 10 minutes north of me, and BOTH my grandmas live 20 minutes south.  My in-laws all live within 20 minutes of us as well, and nobody on either side is looking to move anytime soon.

 

So while we would love to move to a cheaper area, we love the ability to stay close to our family and have our kids interact with his grand and great-grandparents more than a couple times a year.

 

Since we feel drawn to stay in our area, most likely we will have to take on a mortgage in order to bridge the financial gap between what we can currently afford with cash and what it would take to buy a potential forever home.

 

Temporary vs. Forever Home

back into debtOne of the discussions that my wife and I recently had was if we should look for a house that we could live in for the rest of our lives or if we should find something that allows us flexibility in the future.  

 

My wife is currently pushing to find a house that offers the flexibility.  While it may not be the perfect house (maybe slightly outdated and not terribly big), it would allow us flexibility to move in the future if our dream home became available.  

 

Her thinking is as long as we have a certain number of beds/baths, a nice backyard, and a decent kitchen, that she can look past some other aspects for a few years.  At this point, she doesn’t care nearly as much about aesthetics, but more about functionality (including level floors).

 

Pushing for a Forever Home

back into debtMy counterpoint to her is that moving is such a headache.  I also didn’t think I’d live in the house that we live in today for much beyond five years, and here I am going on thirteen years in the same house.  

 

With my track record, the chances of us moving again soon after we move are very slim.  So that’s why I am pushing for us to seek out our forever home.  If retirement is delayed as a result, I figure at least I can come home from work and enjoy it.  Plus, I absolutely dread the thought of moving.  

 

So while obtaining a mortgage is not ideal, we are mentally preparing for it in the near future.

 

Readers, would you take on a mortgage to move into your dream home?  Do you think we’re crazy even thinking about going back into debt?  Share your thoughts below.

Mustard Seed Money

Welcome to the website. A mustard seed is a very small seed but astonishingly grows very large over time. My hope is that through your financial journey that your small investment in time, money and faith will grow beyond anything that you could ever imagine.

90 Comments

  1. I do question the sanity of an indoor pool, but not necessarily the dream home and mortgage. My best man had an above ground wave pool installed in his climate controlled garage (mind you he also lives very far south). It costs him a lot to maintain, like more then a yearly YMCA membership. I wonder if you’d be better off just getting a hot tub by itself, it’d be cheaper. We have one of those tubs with jets. In fact it’s our second house with them. In almost a decade I can count the number of times I took the time to turn on the jets on one hand…and mind you I like a good hot bath from time to time after a work out.

    Back to the house, the one thing you would have going for you is a cheaper area. When I was a kid the family with the biggest home in the area had essentially sold their postage size lot in California and bought a mansion where I live on he proceeds. So depending on the differential it can be a massive change. As someone who lives in their forever home now (so long as we don’t leave Delaware at least) I can attest that I’m much happier now that I have a home with the ammenities I want rather then what we had before. Happiness is a big part of a life…
    FullTimeFinance recently posted…Intrinsic Motivation, how to change yourself and othersMy Profile

    • Thanks for sharing Full Time Finance!!! I’ll have a follow up post on the house…hint pictures can definitely be deceiving. With that said having a forever with all the amenities that you could ever want is a strong allure 🙂

    • Thanks for sharing Daniel!!! It may be the new job smell which normally wears off after awhile 🙂 We’ll see. I definitely have more fun blogging but that doesn’t pay the same!!!

    • I’d probably sell the house we’re in and take the equity to pour into the new house. The current house won’t rent out for more than 1% of the value I bought it at so it doesn’t make much sense to hold on.

    • Thanks for sharing Coach Brad!!! I can definitely attest to the benefits of having a 15 year fixed and paying it off early. It definitely worked out well for us last time 🙂

  2. Nice man! You know my thoughts. Enjoy life now and continue saving. In with you get a forever house why move again or think we should of just got one with x. Your kids would love the pool and most likely all your family as well. You can alwsys smash that mortgage too! Go get it
    Passivecanadianincome recently posted…Solar Panels – 3rd Passive IncomeMy Profile

    • Thanks for stopping by Passive Canadian Income!!! The dream in this case was much better than the reality. I’m planning on posting next week on the house but let’s just say Photoshop is a miracle 🙂

  3. For me, personally, my desire for “dream” anything has greatly diminished after my son came along. It’s just not worth the extra effort trying to attain all the BS. I don’t need a fancy or big house any longer. All I want is time. If you’re that close to FIRE, go for it. I don’t think you will regret it. We had a huge mortgage and it’s nothing but stress.

    • Thanks for sharing Dave!!! I definitely agree that I’d be trading time for some stress. I’m not sure I really want to do that but we’ll have to see what my wife thinks 🙂

  4. When it comes to incurring debt, it’s all about discipline and responsibility. From reading your blog, I think you have been very responsible with debt and would not incur it for the sake of consumption. I believe it’s more of an investment in your family and your wealth. These are two great reasons to incur more debt.

    The second thing is discipline. For someone who is debt averse and tracks his money religiously to maximize the efficiency of his cash in hand and to pay off his debt asap, I called that discipline.

    Base on these two factors, I am recommending the green light. In addition interest rate is rising from historical low, but it’s still very reasonable and affordable. This is another factor that can help you in the long run.
    Leo T. Ly @ isaved5k.com recently posted…Showing Your Appreciation For Mom On Mother’s DayMy Profile

    • Thanks for the green light Leo!!! The thought of going back into debt at times scares me but knowing that it should just be a couple of years makes me feel better. However, I’ll have a write up next week and this house was not quite right 🙂

  5. Some good thoughts (tempo house or perm home) and points (mortgage or no mortgage, early retirement or not).

    However moving itself is a short term issue that you are making into a long term rut.

    Early retirement vs another house to me is a no brainer. Buy the house because now you still have a choice to work or not. If it is important to you to have a paid for house then get it paid for.

  6. Pools are definitely expensive. We have one and the kids love it but it costs more than a membership to the local community center which has a nice pool. We can enjoy ours for 9 months out of the year where we live too.
    There are also resort style neighborhoods that sometimes have almost water park like pool setups. That could be an option if you move.
    Another option is to buy a home on a lake. There are some areas with awesome lake properties.
    Staying close to family is very nice for helping with the kids also. We have definitely taken advantage of the generosity of grandma and grandpa being 20 minutes away. That is another potential cost for childcare to consider. Not to mention the loss of relationship.
    You’ll make the right decision. 🙂
    High Income Parents recently posted…High Income Parents Investment Policy StatementMy Profile

    • Thanks for sharing High Income Parents!!! I think I might be having a guest post coming from grandma MSM b/c she read the post and said figure out where we can all move that’s warmer. Looks like I have some research this weekend 🙂

  7. Ewww, good luck with that decision. For all my happy pablum about being able to cash out of California, the fact remains this is where my family and extended family is set up in a pretty tight geographical area. Leaving this kind of a supportive network is very difficult to fathom, especially with kids. If they leave when they grow up, everything changes. I hear the desire for more, but sometimes maximizing what you have is better.

    Also, as you well know, Debt is an addictive tool, like caffeine and alcohol. Just because you need to “Use with caution” doesn’t mean you can’t use at all.
    Jack Catchem recently posted…How to Detain a MillionaireMy Profile

    • Thanks for the wise advice Jack!!! I hate debt so I definitely don’t wish to become addicted but I can see how it would especially if you’re buying things that you might regret in the future 🙂

  8. Such a tough question because this is SOOO personal. I’m not that attached to the idea of a “dream home.” I think people think that there are things, like an indoor pool, which would make them happy, but usually humans are bad predictors of what makes us happy. I think that’s something you need to really think over. You don’t have to do anything today…and hopefully the answers will come to you!
    Tonya@Budget and the Beach recently posted…How I Spend My (Bleep!) Bucks!My Profile

  9. Hey MSM — so true that kids change the equation. You can’t just take off to Costa Rica with little ones at home or in school, and you need to try to enjoy the journey. Some things are more important than early retirement.

    You’re already financially responsible, so if you want a pool, go for it. You’ll pay it off in a year or so.

    I was just estimating the cost of raising kids in an expensive part of the country, so if you really want to be discouraged (or encouraged?), check out my latest post! Best, Rich
    Rich @ pennyandrich.com recently posted…Rich Will Spend $1 Million On His Kids. Easily.My Profile

  10. It is amazing how different everyone is. I had no problem thinking about working till I was 60 before I had kids. After having our first 7 months ago I can’t stand the thought of working and would retire today if I could.

    I would love to have the financial freedom and time to try and start a business.

    As for going into debt for a new house I would go for the forever (or 20 year type home) and rent your current. With no mortgage 80% of your rent money be extra income.
    Grant recently posted…Read Less and Act MoreMy Profile

    • Thanks for sharing Grant!!! Kids definitely are a game changer. Now that my son is older I definitely want to be at home playing with him. He’s at the library right now and I’m a little bummed when I came home and he wasn’t here. So I definitely can’t wait for retirement 🙂

  11. I’m a Realtor in Florida and finance geek. That said, it’s hard to justify a move for a not forever home when your mortgage is paid. I’m not sure I would necessarily recommend it either. If you find a home that hits all your needs and wants, then yeah, go for it. You can always rent your previous home (if you don’t need the sale for the down payment).

    I’m currently looking to move to a not forever home as well, but I’ve also got tons of equity that my mom gifted me when I purchased the house from her. I’m simply looking to unlock that – so our situation is drastically different.
    Cash Flow Celt recently posted…Septic Tank vs. Sewer: Fight of the CenturyMy Profile

    • Thanks for sharing Cash Flow Celt!!! I looked up your bio on your page and you looked like you’re based in central florida. It may be outside your scope but just curious what do you know about Ponte Verda? I have to admit I’m super intrigued with that area as they supposedly have top rated schools.

  12. We were looking at paying our current mortgage off in the next 5-7 years so the sudden shift to moving this year has left that plan in the dust. It’s not great to take on more debt when you suspect (but don’t know) that the market is due for a dive soon but we’ve decided that we’re looking for our forever home because I don’t believe that any home we can afford has everything I want and need (the elusive dream home) and because I HATE moving. Instead, we have a list of priorities, including good schools for our kiddo, that are long term priorities and don’t leave us with too little or too much house over the span of our expected lifetimes. If we have to decide to move at any point in the future we’ll face that when it comes but we’re looking for the home that we’ll learn to love right now.

    Since I’m not a hypocrite 😉 I don’t think it’s crazy that you’re considering it since your future goals and desired life has changed. Kids do really change the travel equation significantly. It’s not impossible but it’s also a lot harder than it once was which puts a damper on my enthusiasm for planning a lifestyle that includes 100% more travel! And it gets a heck of a lot more expensive when you have more that one or two kids – I see many of my friends with 3-5 kids can’t fly anywhere anymore, it’s just too costly. They do a heck of a lot of driving instead. It’s still travel but it’s very different from what I might have imagined early retirement travel to look like instead, and that’s cool. I like to envision a retirement lifestyle more like Ms. Montana’s! More about the people you love, and the living the life you have right in front of you.
    Revanche @ A Gai Shan Life recently posted…Travel with toddler: going international! (Part 1)My Profile

    • Thanks for stopping by Revanche!!! I definitely would love to live the lifestyle that Ms. Montana does 🙂 She definitely does it up right and is an incredible role model in this area!!!

  13. I mean, this isn’t something to take lightly. But if you think it’s what’s best for your future, go for it! Mr. Picky Pincher and I took on a mortgage while we were still in debt, which definitely delayed our FIRE goals. But it was worth it to us because we just weren’t built for apartment living.
    Mrs. Picky Pincher recently posted…Why We Didn’t Renew Our Costco MembershipMy Profile

    • Thanks for sharing Mrs. Picky Pincher!!! After seeing the house I don’t think we’ll be trading it for FIRE any time soon. But it was fun to explore 🙂

  14. We were in a pretty similar situation a couple years ago-we only had a couple thousand dollars left on our mortgage and the money to pay it off, but decided to instead purchase and renovate a lake-front home that could be our “forever” home (it’s a ranch, so we’ll be all set when we’re old!). The mortgage was significant but nothing we couldn’t still easily afford, but my husband would rather work an extra 5-10 years and enjoy life more. (Of course then you add in boat costs and water toys and there’s another 10 years of working, haha just kidding).

    But for real, you can’t put a price on having family close-by when you have little kids. Family > Being Debt Free. I’m saying this as someone who doesn’t family within 1,000 miles :).
    Making Your Money Matter recently posted…How To Teach Kids to Track Their Income & ExpensesMy Profile

    • Thanks for sharing!!! I definitely want the balance between enjoying life now and in the future. You never know what tomorrow will hold but it seems silly at times not to enjoy what is currently going on around you, which at times I feel like happens to me.

  15. You know, there is no shame in changing a game plan in this journey. You are changing the plan, not the outcome. You will eventually be FIRE because it is a lifestyle that once you are exposed to it you can’t easily forget it. That being said, there is absolutely NO handbook. You do what is right for you and your family…even if that means taking on a loan. Big whoop! And, you’re right, having a kid changes EVERYTHING. As someone who sees families travel all the time, traveling with kids is NOT easy and not every family is geared towards it. In an unofficial tally I would say 5% of parents traveling with there young seem at peace. The other 95% are frazzled, tired, and often snappy. The kids are just being kids but the parents have about given up. Perhaps an airplane is not a good place to take such a tally?!

    Regardless of what you do in FIRE the most important thing is that you aren’t doing nothing…for your sake and the sanity of your wife! What you want to do will come to you in time. Lately I have been thinking I would volunteer at some of the places I wish I had the time to work at…dog shelters being number one. For you as a parent it might look like volunteering at the school or coaching your kids teams. So many opportunities! No need to worry about those now. Make the move that is best for your family (I agree with your wife on the house thing) and enjoy your kids with every spare second you have. 🙂
    Miss Mazuma recently posted…Goldilocks & The Three $$ TiersMy Profile

    • Thanks for sharing Miss Mazuma!!! I feel much better not traveling with my kiddo if 95% of parents are frazzled on a plane. I heard from some parents that said it was no biggie and super easy. But I like hearing your perspective and how some people may misremember what it was really like 🙂

  16. Certainly a personal choice. I’m not sure I buy into a dream house theory. I want a nice place to call my own, but as I get older I want something smaller with less to maintain. Indoor pool sounds nice, but ever walk into a hotel or school that has one? What does it smell like? I know plenty of people in the Northeast that keep hot tubs outside all year round. When we move currently 18 years in house it will be to our forever home. BTW traveling get easier as the kids get older. So don’t dismiss it just yet.
    Brian recently posted…Homey Review: How To Get Your Kids To Do ChoresMy Profile

    • Thanks for sharing Brian!!! I have definitely kicked around the hot tub idea. It would definitely beat the maintenance of a pool 🙂 Plus all the neighborhood kids wouldn’t come over which could be nice as well!!!

  17. Family changes a lot of plans, both kids and spouses. I know I’d like to think I’m in my forever home, but Jon tends to think we’ll move in the future to something different. We’re unlikely to have more kids, and our house works just fine for the 3 of us. That said, we’re here in part due to aging family members, and one day that will sadly no longer be a concern.
    Emily Jividen recently posted…Mutual Fund Terms: Don’t Guess the Flavor EditionMy Profile

    • Thanks for stopping by Emily!!! I definitely agree that family changes things and I love being close to my parents and grandparents. I know not everyone is that fortunate so I am trying to enjoy while I can 🙂

  18. Well we did buy the house we wanted and it has delayed our FIRE date by 5 years at the least. But we are very happy living where we live now, so I would do it again. I am also not opposed to holding a mortgage (we do) as rates are still very low. With the tax refund we get from the government we have an interest rate around the 1% mark; honestly, I wish I could borrow much more at that rate!!

    But I have to agree with the NO for the indoor pool. You are still not thinking with the FIRE hat on. When FIRE you can go for a swim at the public pool whenever you want. After a few tries you will have identified the best time to go (meaning: when it is nearly empty). Let somebody else worry about maintenance and the ever present heating bill! When home the last three months I loved going for a swim at 15:30. The schools just left and most other people are still working then so total people using the pool: less than 10!

    I have to admit, I can think of a few advantages to having your own indoor pool which can not be had at the public pool (think Westworld, episode 5 but with a pool added, and techno music!). But they do not really match your Christian, family orientated life style so those are probably not the reasons you would want one (but they are the only reasons that could convince me to get an indoor pool if I would win a few million on the lottery – which I do not play 😉 ).

    So yes on the house and mortgage, still no on the indoor pool
    financialfreedomsloth recently posted…Monthly expense report: AprilMy Profile

    • Hahaha…I’ve never seen Westworld but I’m guessing based on the description that my wife wouldn’t appreciate coming home to me watching it 🙂

      I’m clearly in the minority when it comes to a pool so maybe it’s time to buck up and move on 🙂

  19. I want to flesh out my earlier comment some. While I think a 15-year fixed, that has a payment a small fraction of your take-home pay, is fine… personally, I’m not about the “dream house” anymore. I sold my dream house (3 stories, deep water, boat life, big lot, great fishing, etc.) three years ago so I could be debt-free. So I did exactly the opposite of what you’re talking about. That said, my daughter is almost done with college. My wife and I are early retired. If I still had kids at home, I’m not sure I would have made the same decision at that point in my life.
    Financial Coach Brad recently posted…How $25 Made My iPhone Like New AgainMy Profile

    • Thanks for the clarification Brad!!! It’s interesting to see how dreams can change. If you asked me three years ago about this I would have definitely passed. Now I’m thinking differently 🙂

  20. We have three children and plan on traveling. We, however, plan to travel really slow, so we will have a home base in a place as long as the visa allows for. Vacations with the kids tend to be more stress than their worth, and to go without them you just miss them the whole time. This is our solution.
    Jessica Deratany recently posted…House Hacking: Lets You Get Your Housing For FreeMy Profile

    • I definitely agree that it was more stressful on vacation this past year with our little one. We’re thinking about driving to the beach and needless to say we’re a little afraid of the car ride. It will definitely be interesting to see how it goes.

  21. Can I just say how envious I am of your proximity to family? It sounds amazing even to live within an hour of one family member, and you have SO MANY so nearby! I hope if you move, you’ll be able to stay fairly close to family. We are moving in a few weeks to sort of a dream house, but will still be 5+ hours’ drive from all relatives. For us, a larger home is important because we want family to feel welcome and comfortable visiting us. I guess it’s all a balance of priorities, and I don’t think any of your options are foolish. Best wishes as you guys decide (and hope you’ll find a house that’s not a mess like the one you mentioned)!
    Mrs. COD recently posted…Frugal Friday: Free Summer Fun My Profile

    • Thanks for sharing Mrs. COD!!! We are incredibly fortunate how close we are to family and we love it. Even if we don’t see them every week it’s nice knowing that they are close by 🙂

    • Thanks for sharing Finance Patriot!!! I figured I’d bounce if things made sense. But at this point they really don’t 🙂 Which is fine by me.

  22. So funny, my husband and I were just talking about this the other day. I don’t see anything wrong with taking out a mortgage to move somewhere that accommodates you and your family. Rates are still extremely low and will likely go up in the years to come. When I was a kid growing up I remember my father saying mortgage rates were 8 to10% so looking at rates down in the high 3’s and low 4’s doesn’t seem that bad. We also live close to our families, in fact my husband’s parents are a few minutes down the road so I completely understand your point on location. As for the indoor pool, I can see an argument for both sides. From a financial standpoint, it may not be the best decision. On the other side, you may get some great use out of it and your kids would probably love it! I remember growing up with a pool and all my friends would come to my house to hang out at night. The extra happiness it brings you and the family may be worth it, just something to consider 🙂
    Courtney @ Your Average Dough recently posted…How to Have a Debt Free WeddingMy Profile

    • Thanks for sharing Courtney!!! Funny that you had a similar convo 🙂 The more and more I read about indoor pools the more leery I become. Definitely intrigued but it’s starting to wane 🙂

  23. Hi MSM,
    Always a challenge and a tough decision, I have heard kids make things a lot tougher. For me its very much the journey to FI as getting there. If you want a nice home, and a pool my view would be go for it. You have young kids and will get a lot out of it, but go in with your eyes open of the costs and maintenance that this is going to entail (believe me, I would love to have a pool and a gym in my home here in London but that would add a few million to the price!)
    In terms of the move, If I were in your shoes, I would go for the pool and the mortgage. You are disciplined enough to work the mortgage down, and recognise the difference it makes to your FIRE date. We took out a huge mortgage to move to our new pad a few years ago, and I don’t regret it. Had we stayed where we were then yes no mortgage, but the space we have now I don’t regret. Also, in the UK the cost of moving is huge, so estate agents (realtors?) will take up to 3% of the value of your home just for showing people around (you can get them down to 1.5%), legal fees and the dreaded Stamp Duty tax….. it adds up massively!
    The mortgage payments will pain you for some time, but then you get into the joy of overpaying and watching it come down!
    If your retirement funds are healthy then this will also make things easier (e.g. if you only had $35k then I would question the move, but say you had $500k then you are well set).
    I am also envious of how convenient it is to have your family so close, but love the fact that the older generation are suggesting a move as well!
    I look forward to see what the end decision is!
    FIREin’ London recently posted…Is this the worst way to start an ISA?My Profile

    • Thanks for sharing FIREin’ London!!! I plan to post next week but quick preview this house was not for us 🙂 We’re trying to narrow down into the neighborhood that makes the most sense so we’ll keep trying to figure things out 🙂

  24. It certainly is nice to live close to family. I know from experience that having both sets of grandparents around to help out is priceless! That said, If you and your wife did decide to reach FI and then move away from your area, you have to keep in mind that when you come back to visit family it could be for a month or so at a time(what with no full time job to get back to and all). So rather then coming in town for a long weekend, you could spend the whole summer with them if you wanted. So you could have the best of both worlds in a way. Just something to think about. Great post!
    The Magic Bean Counter recently posted…Why The 4% Rule Doesn’t Matter In Early RetirementMy Profile

    • That’s a great point!!! I didn’t even think about coming back and visiting. That would be awesome to hang out together although I’m not sure they want a family of four with two under 2 staying with them 🙂

  25. The best piece of home-buying advice I’ve ever gotten was when considering a home, ask yourself “Could I live there forever if I had to?” In other words, could you live with all of the things you don’t like about the house/area/property forever if something happened where you couldn’t move. I’d ask yourself that question before picking a home. As far as the mortgage thing, I’d only do it if you could pay it off within 5 or 7 years…

    • That’s awesome advice Laurie!!! We are definitely looking for a forever home. I definitely am not interested in wanting to move in a couple of years. Once I’m in, I’d like to stay in for awhile 🙂

  26. With your current situation I’d probably hold off until at least your wife is expecting. Gives you the chance to save up additional down payments and you can always rent out your paid off house if needed. The way the market has skyrocketed in some areas I think a stock market panic will depress prices again in the future.

    • Thanks for sharing Duncan’s Dividends!!! The great thing is we’re in no rush right now although it would make me laugh if the perfect house was found around the due date.
      That happened to my sister. I’m not sure she’d do that again.

  27. Oh man, that’s a tough decision.
    I agree with your wife and I’d pick flexibility. Nothing is forever. Your dream home might not be a dream 10 years from now. An indoor pool would be awesome. Sounds like too much trouble for me, though. 🙂
    I think taking out a mortgage is fine.
    Joe recently posted…Why I Pay Money to Go to the GymMy Profile

    • Thanks for sharing Joe!!! I think the dream of a pool is slowly fading. Nobody likes the idea and an indoor pool is even more of a disaster as I read up on it.

  28. It’s really hard for me to even think about going back into debt. We don’t have any debt, but we don’t own a house either, and it’s really hard for me to think about it. Especially after knowing that you had already paid your mortgage.
    I know that math can say YES, but the spirit… I don’t know… As of now, where I am today, I wouldn’t go back into debt
    Friendly Russian recently posted…April 2017 Net Worth Report – $102,337My Profile

    • Thanks for sharing Friendly Russian!!! I definitely have my hesitancy when it comes to going back into debt. Obviously I prefer not to go back into debt but sometimes things don’t always work as well as you’d like 🙂

  29. I moved 4 hours (by car) from family & friends for a job in 2011. My dad & step mom visit 1x a year. My sister & brother have never visited. I get about 1 visit every year or 2 from other friends. Their lives are busy, so is mine. I get back about 1x a month. Christmas, Thanksgiving, My dad’s birthday, Father’s day. My mom sold in that area (property taxes!) but summers an equal 4 hours from where I live, so I see her for 4th of July, Labor day & Memorial day. My aunt & uncle are near by so I get some extended family then, and she spends Christmas at my sister’s place.
    I miss my friends & family. It’d be expensive to move back (I bought a condo last summer) and COL there isn’t great. I moved down here because the job market there wasn’t making me any permanent offers. Should things change regarding the job, in the next 5 years, I would consider moving back. I did buy the condo with intent to rent, should my job situation change unexpectedly.
    For the family aspect, I’d suggest trying to stay in your area for now.
    I work in the biopharm field, don’t be worried about Zika forever, there is work on vaccines.
    I’d stick with your paid off house for now. Kids are small for a long while. They don’t take up much space.
    As for travel with them, some of that will be their personality. My parents took me on camping vacations at a very young age. I was very chill. They’ve told me about arriving at a B&B and the staff were wary of a small kid, but they pushed two chairs together for me to sleep on & by the end of the visit the staff loved me. The other story is: we pulled up to a brick building with white shutters, and from my car seat I said “Is this another old old place where people lived a long long time ago?” “No, this is the hotel” “Okay, good”. We’d seen Williamsburg and Montpelier and I was up for one more, but very glad we were done for the day.
    You’ve got to do what’s best for you, your wife & your family, but don’t let your FIRE goals be derailed.
    My dad retired early & serves on committees. My mom has gotten involved with a local school over the winter. Just look at Mr. Tako and his wood working projects, I doubt you’ll be bored. 🙂

    • Thanks for sharing Jacq!!! It sounds like it’s tough being away from family but sounds like you are doing awesome!!!

      I am a little scared about retirement but it might be in my head as clearly there are many ways to fill my time 🙂 Now I just need to figure what it is that I’m passionate about, besides my blog 🙂

      • I think that’s why my goal is more FI than RE. I’d love to teach yoga, or do other jobs that don’t line up with the 9-5, but I am rarely bored! Plus travel & being able to spend more time with Friends & Family.

  30. If it was my dream house that I could comfortably afford, sure. We spend so much time at home (weeknight 3 + hours before sleep), morning couple of hours before work and weekends generally 5-6 hours each day. That really adds up! Maybe that’s why it’s also an investment…..of our time 🙂 By the way, just curious how you were able to pay off your home so fast? Any tips?
    SMM recently posted…Are Colleges Teaching Personal Finance?My Profile

    • Thanks for stopping by SMM!!! Every bonus and raise that I got I pushed back into the mortgage. I was fortunate that I didn’t allow lifestyle inflation to creep in. Plus having roommates for years before I got married definitely helped put a dent in things 🙂

  31. I don’t see having a mortgage as an inherently bad thing. Debt isn’t bad used wisely. You can diversify – rather than having so much money in one asset, you can spread it out. Even a line of credit at the ready can give you financial flexibility.

    With my rental investments I’m very pro debt. It is a tool that really allows you to accelerate returns.
    Brian – Rental Mindset recently posted…3 Reasons Your Rental Shouldn’t EXCEED the 1% RuleMy Profile

    • Thanks for sharing Brian!!! Debt is definitely a useful tool if you use it correctly which you clearly are 🙂 For whatever reason I’m not nearly as comfortable with debt as I would like which probably hurts me in some ways. I’m definitely too conservative at times around debt.

  32. First of all, thank you for sharing such a personal subject with us on the interwebs. This decision is up to you and your family, we’re the internet birds that chirp in our thoughts.

    With that said, I agree with the comments above. I don’t think a mortgage is a bad thing. It is still a liability but it behaves differently than student or CC debt. If you live where I live (Seattle), if you brought a small house 6 years ago (in a good neighborhood and maintained it) the value of that house would have doubled by now. Really, doubled! No risk no reward, right?

    Also, I lean towards not rushing only because I rushed to buy and it did backfire, poor me ;(. Thinking back, we should have waited even just 3 more months. If I can do it all over again, I would like the idea of buying a lightweight fixer upper since you can put in sweat equity but you have a family so it might be more headache than worth. Small children + construction = No Bueno!

    All in all, it’s up to you and the Mrs (and the market timing and the location….omg this topic is so hard!)

    • Thanks for sharing Lily!!! I like the idea of a fixer upper but with a small kiddo and another on the way. I feel like we are maxing out on time as it is. I don’t necessarily want/need a turnkey (although I wouldn’t turn it down) but something with good bones will definitely work 🙂

  33. I might question the “forever” home concept a bit. Considering that this forever home will most likely be bigger and then when you get older you will probably downsize so I doubt it would be forever. However, I am all in favor of you thinking about the next home that you live in permanently as your family grows. That is perfectly fine. And the truth is, considering the prodigious savers y’all are, the reality is that this mortgage wouldn’t last long. You could scale back the investing to put together when you sell your house to pay cash. Or put money in a specific investment (e.g. brokerage account) and that is your additional house money. You can put it in a fairly safe investment (e.g. municipal bond fund) where the return isn’t great, but will be better than a savings account.
    Jason recently posted…My Advice to New College Graduates: Live Like a College StudentMy Profile

    • Thanks for sharing Jason!!! You’re right as we get older our forever home might not make as much sense. Although it is nice knowing if we wanted to we could stay there forever 🙂

      That’s a great thought of moving some of the investments towards the mortgage to diversify my risk in the market.

      I hadn’t really thought about it but it makes a ton of sense!!!

  34. If you’re going to be moving towards family, and that is something important to your family, then delaying FIRE may be worth it. It sounds like you wouldn’t mind working a bit longer to make the change.

    We would suggest thinking about where you want your life to be in 10-15 years. If it is with your family, working while your kids are in school, and having your retirement accounts continue to increase, then taking on a mortgage when you can afford it doesn’t seem quite so bad.

    • Thanks for sharing Master Duke!!! Being close to family is wonderful and something that my wife and really enjoy 🙂 If it means working a few more years it will definitely be worth it 🙂

  35. Having kids changes everything. Having more than one changes it even more. For me, having a job at least through my daughters college age years is probably going to happen regardless of how much money i save. I want to be a stable rock for her during those years and not be limited due to a financial reason. So, if you follow my same thought, that would mean you would need to delay your FIRE date for some time. Or at least more in line with that 10 year mark regardless of mortgage or not.
    These are tough decisions. I wish you the best with working through it.
    ReachingTheCrest recently posted…4 Signs of Great LeadersMy Profile

    • Thanks for stopping by!!! I too would like to provide that stability although it would be nice to figure out a way to get passive income to do it for me 🙂 We’ll see what the future holds!!!

  36. Lots of things to consider. What is more important to you? Hitting FIRE as early as possible or temporarily postponing in order to retire where you actually want to and that may be more beneficial in the long run? Family becomes even more important as you get older. Moving is a huge pain and so is debt but they are both temporary as long as you have a plan for them and are smart about it. Good luck in your decision.
    Dividend Daze recently posted…How to Decide Between Paying Off Student Loans Early Or Investing (Or Both)My Profile

    • Thanks for stopping by Dividend Daze!!! It’s definitely a trade off and something that we think about a lot. I think we’re leaning more and more towards passing on this one and finding something that makes a little more financial sense.

  37. I’m with you about moving…I truly despise it! And I can totally empathize with your housing dilemma. We’re in a high cost of living area in NYC living in a co-op which is about 800 square feet. It’s a converted 2 bedroom so the 2nd room is pretty small and we have 2 little ones. The youngest still in a crib in our room. At some point, we can get bunk beds but eventually I think we’d need a bigger place. With family close by, I don’t foresee us moving to a low cost area. I’d love to hit FIRE earlier but I think it’s worth delaying if it makes financial sense. Honestly, I don’t really mind my job…it’s mainly the fact that there’s no flexibility. If they had the option to work from home or part time work…I’d have less of a problem pushing FIRE a little further out.

    • Thanks for sharing Andrew!!! You sound like you’re in the same predicament as I am. While I’d love to reach FIRE early I love being close to family.

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge