financial dilemma (pay, million, rate, charge)

[fisher33]

please help everyone! i'm a big dave ramsey fan and wondered what you all thought he and you might say in a situation like this.

i am married and together my husband and i have $320k in the stock market (used to be $400k until the market fell). my husband has a $250k whole life policy and an annuity. we think combined the cash values would be around $40k. i also have about $6k in a 401k. my husband just graduated from dental school and i can find a job anywhere. we know where we want to live and where he wants to buy into a dental practice (upstate sc).

i found a house i really like that meets all our needs - it's perfect. it's listed at $350k but that's too high. i haven't had a real estate agent do the comps yet, but i would probably put in an offer at $280k and the most i would pay is $300k.

as far as bills, we have a car payment that is $420/ month and we will begin renting an apartment in june that is $1000/ month. we also have a student loan that is $10k but can defer it for a year.

so here's the problem. we are moving to dallas, tx for the next year for my husband to do a residency. i will have a job there and his residency will pay a little but we'll be making enough to cover our expenses only. the other thing is we'll need to get a sizeable loan for when my husband buys into a practice - or at least a sizeable down payment to begin with. i'm not sure how much we will need to pay at first yet since we don't have anything specific worked out where we want to eventually be - but the money we would need could range from $40k to $400k.

like i said, this house is perfect and i really, really want to put an offer on it. we could easily live there for ten years or even longer. it's been on and off the market for close to a year, but there's no guarantee it will be there when we're ready to seriously look in march. but i don't know what to do with the uncertainties - we don't know how much money we'll need later and we won't be physically in the house for a year. my parents live within 10 minutes and could check on it for us. the neighbors are always there and could keep an eye on things, and other family members would definitely take advantage of a weekend getaway, but it still makes me nervous. renters also make me nervous b/c i don't know of anyone who would be dependable and trustworthy in my dream home. my husband is very hesistant and i am too, but i'm just trying to figure out a way to get (or at least try to get) this house while not making us have undue worry and stress.

also in terms of dave ramsey, i know he would say we need to pay our car and student loan off and i want to do that too so that adds another stick in the mud.

what would you do if you were us? any and all are welcome. please don't tell me what i don't want to hear...haha, just kidding.

[evilnewbie]

You could take out $320k from your stocks and put it towards your house (not something I would recommend)... if I were you, I would haggle to get the house priced lower as it hasn't been moving in the market... get a FHA loan with maybe an interest only loan for the first year (dental residencies usually don't last that long) and get the seller to pay for closing costs... then switch to a fixed rate when your husband is practicing... buying a practice ain't cheap... I have dentists as friends that I grew up with and they paid 1M+ for practices... maybe your husband can buy a practice for cheaper...

You could just wait for a year when he finishes his residency and buy another house... My friend bought a 400k+ house, bought a practice, and new cars after he finished his residency... but then his wife was a practicing pharmacist too...

Nice JOB on the stocks! Its rare to find someone who saved that much, it seems you are both responsible people.. rare things these days...

[fisher33]

oh thank you about the stock $ - i wish i could say it was us saving, but it was a gift from my husband's granddad (as was the life insurance policy and annuity). we are trying to use it very responsibly. i know his granddad would want us to use the money wisely.

i would love to pay cash for the house and just be done with it since i know we'll be there for a while, but then we'll have nothing to put towards a practice later.

so what would you do?? haha. you didn't tell me that!

what about possibly getting a regular 30 yr fixed and using the cash value from the life insurance and annuity as a down payment? then we would still have a mortgage to worry about for a year though...

sigh.

[evilnewbie]

Yeah your whole life insurance is kind of a waste of money unless your incomes are really high (sort of a tax shelter)... check what the surrender charge is though, it may be stiff...

1) Negotiate a better deal on the house with seller paying for most (if not all) of closing costs. Play hardball with them with a lowball offer of 300k and meet in some kind of middle-ground. They may want to sell badly. Also make sure that there is clear title and no past due property tax on the house.

2) Get approval for a fixed INTEREST RATE only loan with at least 20% down to avoid PMI. The mortgage cost will go down a LOT since you are not paying principal.

3) Take the surrendered payment for your whole life insurance and put it towards down payment and closing costs. (if possibe)

4) I wouldn't recommend a 30 year fixed, especially since you said something about moving to upstate SC (South Carolina?) and having a lot of bills... take the interest only loan and it should greatly decrease the monthly mortgage payment (to affordable levels). Try to get away from the rental lease (explain it to the landlord, some can be very understanding). Move into your home.

5) Once you start to make more money, transform your loan into a fixed 30-year rate loan since you can afford to pay it off now.

6) Personally, I wouldn't buy the house... there will always be another home you can fall in love with... especially if you are moving to another state in the future.

[baystater]

to be honest I wouldn't buy the house. Get your Careers/Practice in order first. I didn't happen to catch your occupation but your husband choice of careers is a money make( My longterm GF's parents are both dentists). I'd say rent, pay off any bills you owe, and keep saving for that practice for right now. Now once you get that practice up in running (which from what I get from my GF's parent is a ton of work at for the first couple of years.) you'll be in the catbird's seat and will probably be able of afford something even better by that time.
Good luck to you.

[fisher33]

thanks for the advice you two. honestly not what i want to hear, but i know you're probably right. i was hoping someone would have an easy clear cut answer of how i could get the house...haha. i grew up in the area the house is in (upstate sc) and know that this is a great opportunity so i'm not sure that a house i will love just as much will be available in march, but i'll probably be able to find one i like pretty good.

i'm so sad right now.

[baystater]

Originally Posted by fisher33

thanks for the advice you two. honestly not what i want to hear, but i know you're probably right. i was hoping someone would have an easy clear cut answer of how i could get the house...haha. i grew up in the area the house is in (upstate sc) and know that this is a great opportunity so i'm not sure that a house i will love just as much will be available in march, but i'll probably be able to find one i like pretty good.

i'm so sad right now.

Why be sad. Look I know you like the house but if you play your cards right and things go well.........Heck you might get something 10 times better sooner rather than later. Yeah I know you love the home and probably got attached to it. This happens to a lot of buyers. But hey it's just a house out of millions to choose from. Patience you get what you deserve/want and perhaps even more so if position yourself right.

[fisher33]

millions in our 20 mile radius?! haha

thank you again baystater.

[HappyTexan]

With the economy the way it is right now..you are taking a chance getting so much into debt at this point.

If it were me..I'd wave goodbye to the house and get the career going. There are plenty of houses out there and you never know what may come along.

[fisher33]

okay - no one post unless you tell me what i want to hear....haha, just kidding. thank you happytexan. i know you are all right. it's just hard to not get this most perfect house. i mean PERFECT. (;