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amother
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 Mon, Jul 29 2024, 8:52 am
Townhouse with no mortgage or single family with mortgage?
We are trying to navigate our next step. There are beautiful townhomes in our community that are 2500 sqft 4 bedroom 4 bath somewhat new build. There is an HOA but it is minimal, the area is safe and is a young thriving neighborhood.
My husband is a private person and doesn’t love the idea of sharing space with other people. But we have enough parnassa to purchase this townhome in cash and would be able to begin our marriage without a mortgage payment. I bring in a significant salary into the marriage so this would give me peace of mind when I take a break to have our first child bzh.
Option 2, which my husband wants, is to purchase a single family home. But we would need to have a mortgage on it. I am not sure we could cover the mortgage and living expenses with one salary and will feel less comfortable not working after my first child, I will feel pressure to return to work which will be so stressful and heartbreaking. The single family home is however a more long term option, I wouldn’t want to live in a townhome for more than 5-7 years. I want my kids to also have privacy and to be able to play in their own yard
What is your advice?
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amother
Mint
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Mon, Jul 29 2024, 8:54 am
| amother OP wrote: | We are newlywed and are trying to navigate our next step. There are beautiful townhomes in our community that are 2500 sqft 4 bedroom 4 bath somewhat new build. There is an HOA but it is minimal, the area is safe and is a young thriving neighborhood.
My husband is a private person and doesn’t love the idea of sharing space with other people. But we have enough parnassa to purchase this townhome in cash and would be able to begin our marriage without a mortgage payment. I bring in a significant salary into the marriage so this would give me peace of mind when I take a break to have our first child bzh.
Option 2, which my husband wants, is to purchase a single family home. But we would need to have a mortgage on it. I am not sure we could cover the mortgage and living expenses with one salary and will feel less comfortable not working after my first child, I will feel pressure to return to work which will be so stressful and heartbreaking. The single family home is however a more long term option, I wouldn’t want to live in a townhome for more than 5-7 years. I want my kids to also have privacy and to be able to play in their own yard
What is your advice? |
Mortgage rates are very high right now. For sure buy the townhouse with cash. Save save save as much as possible. When you saved up enough, buy a single family house, but keep the townhouse and rent it out.
Unless for some reason you have good reason to believe that the single family house you want to buy will triple in value over the next 5-6 years.
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amother
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Mon, Jul 29 2024, 8:55 am
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Buy the townhome … build you your savings again to then eventually buy the next home with mortgage and either keep this one as rental property or sell. More properties the better!
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amother
Snowflake
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Mon, Jul 29 2024, 8:58 am
If your goal is to have the house anyways, and you can afford the down payment and mortgage now, I’d do that if it were me. Buying a temporary home doesn’t seem worthwhile. Also you mention not being able to afford the mortgage on one salary, but you also mention moving after 5 years so your kids have space. So you’ll still be making mortgage payments at that point in time. And you can put down a larger down payment to reduce mortgage costs, plus make extra payments now while you can afford to so you can save money down the road (or save it to use towards expenses if you want to take a break from work
I also wouldn’t base my decision on possibly wanting to take a break from work a few years down the line, you have no idea what life will bring
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amother
Grape
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Mon, Jul 29 2024, 8:59 am
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In normal times I’d tell you to buy the house with the mortgage. Even multi billionaires like trump take mortgages because it’s financially worthwhile. However when the interest rates are so high, then it’s probably better to buy without a mortgage these days. You can always sell or rent out and use a 1031 to buy a new house with the money from your sale or if you rent out from your HELOC
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amother
Nemesia
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Mon, Jul 29 2024, 9:04 am
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amother
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Mon, Jul 29 2024, 9:24 am
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I would for sure do a single family with mortgage. If you guys value privacy then the mortgage is ABSOLUTELY worth it.
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amother
Waterlily
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Mon, Jul 29 2024, 9:34 am
I'm a little confused. If you can afford to buy a townhouse with no mortgage, would you not be able to afford the single family home with not such a large mortgage. Are they really so different in price?
I personally would go for the single family home, despite it having a mortgage. I value my privacy, and I see some of my friends who did go for something smaller or shared, and now they want to move they're struggling as they can't afford the jump, and they are locked in and it's much harder to move. We waited longer and bought a larger house. Yes we're paying more for our mortgage, but it's the house I wanted.
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amother
Mauve
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Mon, Jul 29 2024, 9:34 am
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What's the price difference between the two?
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amother
Blue
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Mon, Jul 29 2024, 10:04 am
| amother Mint wrote: | Mortgage rates are very high right now. For sure buy the townhouse with cash. Save save save as much as possible. When you saved up enough, buy a single family house, but keep the townhouse and rent it out.
Unless for some reason you have good reason to believe that the single family house you want to buy will triple in value over the next 5-6 years. |
This!!!
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amother
Starflower
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Mon, Jul 29 2024, 10:11 am
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Single family homes usually go up in price more than townhomes so if you can buy now it would save you money in a few years.
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amother
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Mon, Jul 29 2024, 10:16 am
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Singles family home is a better investment than a town house. They don’t increase in value as much
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amother
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Mon, Jul 29 2024, 10:19 am
| amother Mauve wrote: | | What's the price difference between the two? | townhomes are $440k and are in excellent condition. The single family’s are $600k but they likely need some TLC
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amother
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Mon, Jul 29 2024, 10:22 am
| amother Wallflower wrote: | I'm a little confused. If you can afford to buy a townhouse with no mortgage, would you not be able to afford the single family home with not such a large mortgage. Are they really so different in price?
I personally would go for the single family home, despite it having a mortgage. I value my privacy, and I see some of my friends who did go for something smaller or shared, and now they want to move they're struggling as they can't afford the jump, and they are locked in and it's much harder to move. We waited longer and bought a larger house. Yes we're paying more for our mortgage, but it's the house I wanted. | we primarily live off of my income at the moment. My husband has a wonderful company but its momentum is building and is not 100% reliable at the moment. If I had my first child I could be forced to go back to work so that we could pay our mortgage payment. My husbands company could succeed by them bzh, this is all theoretical and just planning
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amother
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Mon, Jul 29 2024, 10:26 am
| amother OP wrote: | | townhomes are $440k and are in excellent condition. The single family’s are $600k but they likely need some TLC |
Are you more sure about one neighborhood or the other?
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amother
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Mon, Jul 29 2024, 10:27 am
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no the neighborhoods are right next to eachother
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amother
Oleander
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Mon, Jul 29 2024, 10:34 am
I vote house.
It's a small price difference.
If rates drop, you can refinance at a later date.
Privacy is invaluable
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amother
Maize
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Mon, Jul 29 2024, 10:39 am
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So a mortgage on less than 200k? That is a very doable payment. And no HOA fees.
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amother
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Mon, Jul 29 2024, 10:43 am
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Townhouse can be rented out in the future. You’ll get privacy. You don’t need privacy at the moment. Also by living in a townhouse you’ll learn exactly what you want/need in a larger space.
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amother
Dandelion
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Mon, Jul 29 2024, 10:43 am
For all those saying mortgage rates are so high... they aren't, historically. They're just high compared to Covid rates of 3%, which were artificially low.
A 6% rate is normal.
OP, go to a mortgage broker and have her run the numbers. If you have 440K, you can put down 350K on the home and have 90K for repairs. You'll have a mortgage of 250K, which at 7% is a monthly payment of $1663 (principal and interest) per month. That's a very small housing payment. Your husband should be able to cover that whether or not his business takes off.
If it takes off, that's nothing.
If it doesn't, he better find a job that brings in more than 3K per month.
I vote house.
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