Am I FOMO-ing or am I making the right choice? (Boston: renting, loan)

[BostonMike7]

I went from Condo to SFH when we had kids, and it was the best decision I ever made. Condo was great as a single, not so much with family. I've come to appreciate the space, and seclusion and not having to mind much if the kids were jumping up and down at 6AM and waking the people on the floor below them.

I also think you should budget in the kids expenses now and see if that $3800 give or take monthly payment is sustainable for 30 years when you start factoring in child expenses, especially if child care will be a factor. I can only relate from my personal perspective, but we have 3 kids, HHI of $210+K and in an financially secure place and I wouldn't be comfortable with nearly $4K in mortgage, tax, insurance before utility costs.

[GeoffD]

You'd better hurry up. The days of the sub-3% 30 year fixed mortgage appear to be behind us unless you fling a lot of points at the bank. Rates are still at historic lows but I think it's unlikely we'll see those laughably low rates again. Ten year treasuries have averaged around 2% for the last decade. They're back up to over 1.5% now.

[yesmaybe]

Originally Posted by Johnduh

It has it’s pros and cons as you would know. Walking to work is great, but hearing the neighbors sucks, especially a toddler above us.

That's more a sign you live in a crappy condo than anything else. Which is unfortunately very common.

[brightdoglover]

If OP liked the condo living, they should stay there, but they shouldn't if they don't like it and can afford what they do want. It's amazing how fast you get used to a new mortgage payment, even if you move up the ladder in expense. Kid or no kid, they are finished with the condo living and I doubt house prices closer in, like Medford, are going down in our time to see.

[Johnduh]

Originally Posted by BostonMike7

I went from Condo to SFH when we had kids, and it was the best decision I ever made. Condo was great as a single, not so much with family. I've come to appreciate the space, and seclusion and not having to mind much if the kids were jumping up and down at 6AM and waking the people on the floor below them.

I also think you should budget in the kids expenses now and see if that $3800 give or take monthly payment is sustainable for 30 years when you start factoring in child expenses, especially if child care will be a factor. I can only relate from my personal perspective, but we have 3 kids, HHI of $210+K and in an financially secure place and I wouldn't be comfortable with nearly $4K in mortgage, tax, insurance before utility costs.

Thanks for the tips. Greatly appreciate it.

[Johnduh]

Originally Posted by yesmaybe

That's more a sign you live in a crappy condo than anything else. Which is unfortunately very common.

Indeed. The quality of build was another concern of ours to make our decision to look elsewhere. Thin walls and insulation is subpar. The second bedroom feels like you are walking into a meat locker.

[Johnduh]

Originally Posted by brightdoglover

If OP liked the condo living, they should stay there, but they shouldn't if they don't like it and can afford what they do want. It's amazing how fast you get used to a new mortgage payment, even if you move up the ladder in expense. Kid or no kid, they are finished with the condo living and I doubt house prices closer in, like Medford, are going down in our time to see.

We enjoy the convenience, but that can only last for so long.

[GeoffD]

Originally Posted by Johnduh

Indeed. The quality of build was another concern of ours to make our decision to look elsewhere. Thin walls and insulation is subpar. The second bedroom feels like you are walking into a meat locker.

You can always remove the sheet rock and re-insulate exterior walls; and do sound mitigation on shared interior walls and ceiling. Sure beats $3,800/month for a house in Medford.

[GeoffD]

Originally Posted by Johnduh

Our combined gross is 180k.

I dropped some numbers into a spreadsheet. Assuming you both max out your 401(k) and you'd be insane to not be doing that, I estimated your net pay.


$180k gross
$13,770 in payroll taxes
$39,000 in maxed 401(k)
$6,410 in state income tax
$17,000 in federal income tax


Your net after taxes and 401(k) is $103k and you probably have employee-paid medical/dental taken out.


Buying a house, 12 months of interest on a $550k 3.5% 30 year fixed loan is $19,081. Your State & Local tax is capped at 10k. Your Schedule A is only $5k more than the standard deduction. You're in the 22% bracket so the tax break is less than $1,000. Your take home pay doesn't change much at all.



Anyone here can tell you that owning a house has a bunch more expenses than mortgage, taxes, insurance, and utilities. Well more than half your net is going to the house. You're going to be much more car-dependent so you're looking at car payments and car depreciation & operating costs. You have to furnish a 3,000 square foot house.


Another way of looking at this is that people buying in Medford are W-2 buyers. They have to qualify for the mortgage. If interest rates go up, they qualify for a smaller loan. There are towns that are probably impervious to an interest rate hike but I don't think Medford falls in that category.



You don't need a house now. Maybe you could trade up a bit with your condo and have a small mortgage you could zero out quickly if you wanted.

[porterhouse]

How long have you owned in Boston? I assuming you have made a lot of money on that property. With no mortgage, that is always a nice check to cash. You can afford the mortgage, but it's big for $180k income. It's all about what you are comfortable with. Can you buy down the mortgage principal a bit further?

I think cashing in Boston to invest in somewhere like Medford is a good thing in general. With inflation rising, real estate is looking like a better place to park your cash by the day, and don't let anyone tell you your primary residence isn't an investment. In this area, it absolutely is.