UPDATED Pics. Can We Afford to do this: House Mortgages

[Pom]

So, we have been exploring the neighborhoods and areas we are interested in buying for the last 10 days.  Today, we stumbled on a house that is pretty damn close to everything we want.  Our house only hit the market last Thursday.  We've had a couple of showings, so fingers crossed.  Chances are, this house won't stay on the market until ours sells.  BUT.

When we spoke to our current lender about a pre-approval letter, she approved us for a smaller amount without selling our house and double that amount after our house is sold.  

If the lender gives us the smaller mortgage, we have cash reserves and can cash out non-retirement investments that would cover a full price offer for this house.  Our realtor is doing all the homework, so we won't do anything until we explore all the positives/negatives of this house and location and make a competitive offer. If we do decide to move forward now.  So, we will have 3 mortgages: this new house, our San Antonio house that is on the market, and our Michigan vacation house.  Plus temp housing.

This would deplete our "cash" to about $20k, but Mr. P goes back to work tomorrow.  We can carry all 3 mortgages and expenses on his salary.

The only down side really, besides carrying all the mortgages and temp housing until our house sells (they estimate no longer than 30 days on the market) is cashing out some investments in a down market. 

 Would you do it?

[krystee]

Given his industry, how stable is the new job? If very, then yes.

But only if you post pics so we can admire it.

[lurknomore]

I'm assuming your sales price on your for sale house is more than you owe? If so, I'd say do it. We carry less than 20k "cash" reserves at nearly all times. With three kids. How long do you have left to pay on your temp housing?

[Pom]

Oh geez. "Very" stable/secure would be a gross overstatement for anyone in oil and gas right now. But I understand your concern. We are weighing "resale-ability" (is that a word?), heavily. Houston is not as propped up by O&G like it once was, so that's good for the housing market.

That said, they are spending a considerable amount of $$ to bring him on board. I think he will be okay here as well as anywhere. The new co is paying all our realtor fees, moving expenses, allowance for housing, sign-on, etc...

Will work on photos

[Pom]

Feb 14, 2016 20:06:39 GMT -5 lurknomore said:

I'm assuming your sales price on your for sale house is more than you owe? If so, I'd say do it. We carry less than 20k "cash" reserves at nearly all times. With three kids. How long do you have left to pay on your temp housing?

We will most likely come out with $110k-$115k equity in our San Antonio house. We will only be in temp housing until we have somewhere to go....hence our urge to jump on this house.  It is the exact same price as our "for sale" house.  We are hesitant to buy more house than we need, especially because of industry conditions for Mr. P.

[daisyn]

Totally depends on how much the "smaller" mortgage is
My answer would be very different if the mortgage was $500 vs $2500

[spunkarella]

My concern would be less about affordability and more about whether or not you know the job and area well enough to buy a house just yet. Is renting for a year an option?

[Pom]

Feb 14, 2016 20:27:56 GMT -5 @domerjen said:

My only concern is whether it's going to be hard to sell your current house w/ the market in TX? What happens if it takes a long time?

Clearing out the investments in a down mkt isn't that big of a deal if you sell soon, b/c you can replace the $$$, YKWIM? I know you don't have a crystal ball, but I'm sure you can find out what the typical days on market is for your 'hood.

San Antonio is pretty strong. We are outside of town so longer for us by a couple of weeks. There is only 1 other house for sale In out subdivision. Last 2 houses sold in 1-2 weeks.

[Pom]

Feb 14, 2016 20:43:45 GMT -5 spunkarella said:

My concern would be less about affordability and more about whether or not you know the job and area well enough to buy a house just yet. Is renting for a year an option?

We lived about 1.5 hours from this area for 7 years and were over here often. We've known we'd be moving here at some point in Mr Ps career. We feel pretty confident about it. I think our REA is going to be a good ally and I can't do any time in an apartment this move. Plus our move is entirely paid. Mr P knows some current employees at his new gig. I think we just can't know the future but we've done our homework.

[raangoli]

The 3 mortgages would be temporary. I'd do it if you're sure that the sellers market is strong and your SA house will have a buyer quickly.

[imojoebunny]

In your shoes, it is a risk I would take. I don't think your maxing out your buying potential, so while the $20k in cash is a thing, it's not your only thing. We qualified for our current house with 3 mortgages, we did not include our rental income in our application, and our vacation house has no mortgage, but we also don't rent it. We took a home equity line on our existing house, and sold some stuff we needed to sell anyway, we paid it all back 45 days later when we sold, investing and paying off the HELOC. Our house had 3 offers in 24 hours, and additional back ups a day later. The carry cost was minimal and worth it (big premium for a perfect house with fresh paint vs. My kids still in it)

[Deleted]

I say go for it.

[ellipses84]

With everything you've said, I'd do it.

[1yeartogo]

The thing that gives me pause is selling assets in a down market to take this on. Honestly, sometimes something seems perfect, but with housing something new could pop up in two weeks and be an even better fit ykwim? I wouldn't feel comfortable and would want to wait until the other house was under contract. It's February (not historically a great month to sell) I think every single week closer to spring there will be more and more options opening up that may not require you to do all this financial maneuvering.

[compassrose]

Feb 14, 2016 21:15:58 GMT -5 raangoli said:

The 3 mortgages would be temporary. I'd do it if you're sure that the sellers market is strong and your SA house will have a buyer quickly.

I'm here. But I have no idea what your market is like.

[MNH2013]

I agree with pictures!
Is it a new build? Would another lender give better options?

[Pom]

Feb 15, 2016 8:01:14 GMT -5 MNH2013 said:

I agree with pictures!
Is it a new build? Would another lender give better options?

It's a resale. I am going to call our other lender options via H's employer today.  

[SJ]

Yes, it sounds like you can afford this.

[mbcdefg]

Sounds doable - good luck!

[Pom]

s722.photobucket.com/user/pombride/slideshow/Acadian


krystee MNH2013

[compassrose]

It's GORGEOUS! Those floors! And the moulding! And that KITCHEN!

Pom, you need to update the post title to reflect that the pics have been added.

[elcjet]

I would do it, only because you're in a good spot and have had good activity on your current home.  Maybe you can push the closing to 45-60 days out and in that time get your house under contract and sold?  Then you can try to get the higher mortgage and avoid the financial mayhem that must ensue to buy it first.    

We just went through something similar, although I gambled that my house would sell first and it would all work out.  It did, thankfully, but I feel we were lucky.  My plan was to do a 401K loan as a bridge loan until the house sold....ideally the money would have only been borrowed for 15-30 days, and honestly, I wasn't concerned about the time value of that money.

[raangoli]

Gorgeous home! I hope it works out for you!

[Pom]

Feb 15, 2016 14:17:44 GMT -5 @rennido said:

Pom ,
YES! I love the house! Does it have a pool?

No pool but a great space for one.  I think we will hold off on that for a bit...until H's industry has some upturn.

[konapoppy]

OMG that kitchen.
Buying is definitely a risk, but is sounds like you are up for it. Good luck with your decision!

[sfy]

Those floors! I love it. My answer was always yes, I would do this .

[Roc A Bee]

What a pretty house!

Yes I would do it.

[krystee]

Yes, buy it!

[moolarkey]

That is beautiful. I hope this works out for you.

[MNH2013]

I love it! Is it close to me? That makes me want to move to wherever you looked!