Winnetka in $750K house, bad idea? (Chicago: loans, buying a house, neighborhood)

[shamrock847]

Originally Posted by JenniferFn

using 1228 Oak as a case study....what other than the one-car garage is compromised? We're coming from Chicago where the std. lots are 25 x 125, so this type of place doesn't seem that limited and the backyard comparatively palatial. Most of these owners have kept houses up and renovated baths and kitchens along the way, right? You can't get a new house in LakeView, Lincoln Sq., Bucktown, or LP in the city either, for the price range we are discussing. At least you get non-CPS schools in Wilmette/Winnetka.

Overall, if I were looking in Winnetka in your price range that house would be on my short list. It's a great location, reasonable size for the price, appears to be taken care of (need to verify, of course), and is one of the few 4br options in that range.

From looking at the ad briefly online, in addition to one car garage, some of the "compromises" are:
- Some of the paint choices look a little dated (easily fixable)
- The kitchen appliances may be a few years old (fixable)
- The master bath looks somewhat dated (1990s?) (fixable)
- Not everyone likes the 1950s house styles
- The location info mentions "Flood Zone (Partial)" so I would want to know what the flood insurance premiums are and if there is any history of basement flooding. Could be a non-issue.
- You're across the street from the Jr. High Schools which may be a plus or minus in your view

Any house you buy in any price range is going to have some compromises. At your price point the trade offs you have to make are a lot less challenging that what someone with less buying power is going to face. The important thing is that you like the house and the community.

[mattywo85]

I guess I am just looking at it from a no mortgage POV. If I had that much money I'd buy a house outright. There are PLENTY of nice areas you can buy a house for $300k and under. Then again the OP sounds like they make quite a bit so buying in a super nice neighborhood with a mortgage probably isn't a big issue.

[plates]

While you say that you want to know if your kids will fit in it sounds like you're more worried about living in the most expensive place you can afford. You wouldn't have this conundrum if you were looking into the other suburbs that you dismissed and they are top tier as well. There is no guarantee what your kids will feel like but usually the ritzier the area the more likely it is. There is also the chance that you and your spouse will feel this way.

[reppin_the_847]

Originally Posted by JenniferFn

Will our kids feel like have-nots in Winnetka under this scenario? (I grew up in Deerfield and have no desire to live in Deerfield, Glenview or NBK, so please don't suggest that "we'd get more house for the $$" in those burbs, etc., no offense)

I can understand this part for sure. There's simply a different feel with the lakeshore towns along the Union Pacific North line compared to the aforementioned towns within the Milwaukee North line.

[3Series]

Originally Posted by mattywo85

I guess I am just looking at it from a no mortgage POV. If I had that much money I'd buy a house outright. There are PLENTY of nice areas you can buy a house for $300k and under. Then again the OP sounds like they make quite a bit so buying in a super nice neighborhood with a mortgage probably isn't a big issue.

Buying a house outright in the current environemnt is not financially smart. With conforming loans less than 4% (30yr product) and mortgage interest deduction, the least amount down would be the smartest thing.

To OP, I'd reccomend putting down 20% and getting a 30yr loan. Pay it off as if it were a 15yr loan, also the 30yr product is the most cost efficient product to originate. Yes, you'll pay more in interest, but you'll have greater flexibility. In addition, cash is king, so instead of tying up capital in your house, you're better off conservatively investing it and using part of it to pay your loan each month.

$150k @ 7% will earn you $10,500 each year and say you take home 80% of that after taxes, that's almost $700/month of income.

[chet everett]

I completely agree with the numbers -- nuts not to lock in a low rate on borrowed money as it is highly likely that over the next 30 years or less we could be seeing interest rates that are double or more. Use "inflated money" down the road to give the bank what they ask for...

Of course the OP seems to be the kind of person that might loose sleep over downsides and if having large equity / house paid off early is what gives 'em piece of mind then the ol' spreadsheet is not what matters...

Originally Posted by 3Series

Buying a house outright in the current environemnt is not financially smart. With conforming loans less than 4% (30yr product) and mortgage interest deduction, the least amount down would be the smartest thing.

To OP, I'd reccomend putting down 20% and getting a 30yr loan. Pay it off as if it were a 15yr loan, also the 30yr product is the most cost efficient product to originate. Yes, you'll pay more in interest, but you'll have greater flexibility. In addition, cash is king, so instead of tying up capital in your house, you're better off conservatively investing it and using part of it to pay your loan each month.

$150k @ 7% will earn you $10,500 each year and say you take home 80% of that after taxes, that's almost $700/month of income.

[tomcho]

Originally Posted by 3Series

Buying a house outright in the current environemnt is not financially smart. With conforming loans less than 4% (30yr product) and mortgage interest deduction, the least amount down would be the smartest thing.

To OP, I'd reccomend putting down 20% and getting a 30yr loan. Pay it off as if it were a 15yr loan, also the 30yr product is the most cost efficient product to originate. Yes, you'll pay more in interest, but you'll have greater flexibility. In addition, cash is king, so instead of tying up capital in your house, you're better off conservatively investing it and using part of it to pay your loan each month.

$150k @ 7% will earn you $10,500 each year and say you take home 80% of that after taxes, that's almost $700/month of income.

[Larry Siegel]

*Good* idea. Wilmette is an even better idea - you get more for your money and you'll be in the second quartile not the bottom quartile, although, really, who cares what quartile you're in.

The ambience of the North Shore, especially the older, southern North Shore (Winnetka and south), is hard to beat, as is New Trier High School. The drawbacks have been discussed. Your kids may perceive themselves as competing with the girl in the Youtube comedy video who says, "I have just the *worst* horse *ever*." Mine went through a little of that. It's a small price to pay for being in a physically gorgeous area, close to Chicago but far from serious urban problems, and in a social setting where interesting and accomplished people will be pulling your kids upward, not pushing them down.

At today's depressed prices your $300K downpayment is a godsend. There are plenty of houses (charming older construction) in the $750,000 price range, although fewer in Winnetka than in Wilmette. (North Evanston, which is just as charming, has a different school situation that we chose not to deal with.) Welcome to the North Shore.

[Anthera]

You'll fit in fine in Winnetka. Not everyone that buys a "starter house" is ever able to move up. Sometimes they stay in the starter house even if they can. Age wise there are plenty of parents your age (either starting late or large families).

Status wise, a smaller house that is a "jewel box" is considered nicer than a larger house that's gone to the dogs (more of those around than you would think).

[Sarah H.]

I think you'll be fine. 750K can buy a nicer house in Winnetka these days. There's a lot less keeping up with te Jone's than you think. Most people who move here with kids do so for the "Mayberry" lifestyle not to buy stuff in excess. In Winnetka you see kids riding their bikes to the drug store to buy candy on their parents' house account or riding to the park to meet up with friends. There's a strong sense of community and safety here. My kids know they must behave when they go out because chances are they'll be seen by someone I know.

Good luck with the move!