Shorter commute but more expensive house (pay, income, mortgage, savings)

[Prediluted]

Really just looking for some general thoughts / what have I not thought of on the finances of a potential move.

I make $100k in NH, with salary growth in the past of 8-10% annually (7 years now), very likely that will continue until I hit $140 - at which time it will either be COL growth, or a large bump to $200k+ (partner). Right now we live 50 minutes from where I work. My wife works 1 day a week to keep up her skills, about another $10-13k annually, but stays at home with our daughter, with soon more kids to come.

We live about 50 minutes from my work, and are contemplating a move to a spot 10 minutes from work just outside the city, with buying a similar grade home. We would have a 20% down payment, and similar grade homes to what we have now are $400-450k. Current mortgage payment (PITI) is $1971, PITI on a new home similar grade is $2400-2700. - relatively high property tax area.

Moving to this area would save us $300/month in gas & tolls & auto maint, $100/month in road maintenance (private road), $200/month in hot water /heating costs, and about $100/month in other costs. Several other costs are marginally higher such as auto insurance.

On paper, this works to break even financially, plus giving me another 1.25 hours a day with the family, as a percentage of income the mortgage payment would go up significantly. Overall we live in a relatively high COL state - median home list price is $280k, in the southern half of the state it is a bit higher then that, my guess is a decent chunk over $300k.

If we did such a move, afterwards we would have $30k in the bank, and would still be doing 15% 401k, 5% taxable investments, 5% HSA(just about maxed out), 2.5% just building more cash reserves. We also have another chunk or so set aside on a monthly basis for things like pet care, home repairs, auto repairs, and auto replacement - comes to about 35-40% of our after tax income is set aside each month. Overall net worth is about $240k, we are in our late 20s.

What are your thoughts/what would you do? Stay put? Move to similar grade home? Move somewhere in-between? Buy a lot cheaper but lesser grade? Not sure what we are going to do yet, so just looking for some other thoughts that possibly I haven't explored yet.

[djsuperfly]

This looks like a no-brainer to me. You're going to be able to keep up a good savings/investment rate, while in a worst-case scenario break even. If you're on the low side of your new-house estimate, you'll actually be pocketing some money from the move. Plus, I think you are underestimating your wear-and-tear and depreciation on your auto. It's probably closer to a $500-$600 savings there than $300. This is all while eliminating what is a pretty lengthy commute. Commutes are a giant time-suck. In your shoes, I'd personally be glad to even lose a little money to obtain the new commute.

Plus, I'd imagine this puts you closer to a larger town/amenities. Think about what happens when your kids are ready to be involved with sports and clubs. So, it won't just be your work commute you'll be lessening.

[numsgal]

It's difficult to put a price on the extra time spent with your family every day.

[Mr. Zero]

How do the schools compare?

[reed303]

You get a new home, shorter commute, maintain an excellent savings rate, assuming closer to shops & stores. Go for it.

BTW, how is that 50 minute commute in winter ?
And curious where the hot water/heating savings comes from. Usually that would be a wash. (Unless maybe going from all-electric to natural gas ?)

[Grlzrl]

I am curious why living on a private road would save you money? I would think it would be the opposite. But other than that, I think you should do it. I agree that commute savings would be worth it. (time)

[rjm1cc]

My first impression is that I would want a commute of an hour or less.
You did a good job of analyzing your options and explaining. Since you project a breakeven financially I would be moving. If it was not breakeven but you could afford it I would still move. I have had an hour commute including public transportation and a 20 minute commute by car and the 20 minutes by car was excellent.
The question on schools I missed although I am very much aware of the quality of education in my area. As long as the quality of the schools does not go down I would move.

[Wartrace]

I did a 50 minute +/- commute for about 6 years. Never again!

Using your calculated savings and the upper end of your total housing expense you should be 29 bucks ahead every month AND have TIME. Seems like a good idea to me.
Sitting in a car for close to an hour each way is unpleasant at best.

[djsuperfly]

Originally Posted by Grlzrl

I am curious why living on a private road would save you money? I would think it would be the opposite. But other than that, I think you should do it. I agree that commute savings would be worth it. (time)

I read that as he currently lives on a private road and, therefore, has to pay maintenance on it, hence the savings by moving.

[Lowexpectations]

I went from a min 90 min commute each way to 20 minutes. Net cost was at the time 500.00 more a month, tax law changes have push that higher to 700.00 or so but it was worth it and I wish I’d done it sooner