We know we can't live forever in a one bedroom condo with our son and pretending we can is just silly, especially with home prices in our area.
So we sat down, ran the numbers and looked at the current housing market... Given our current income and the area we live in, the only way we would be able to move into a larger place is if we significantly pay down our mortgage and have a HUGE down payment to ensure a smaller loan on a new property.
After all, 2 bedroom places are $300,000 and up for a condo barely larger than our current one.
Why 5 years?
- In 5 years our little one will start school and we should be able to eliminate daycare and use that money for a larger mortgage payment on a larger property. Since our current mortgage is tiny (my original loan was for only 120k), we will need that daycare money since we couldn't even sell our place now and buy it again with a mortgage.
But if we take the money we would be putting toward Roth IRA's and instead send it to our our mortgage, we should be able to wipe out an additional $30,000.00 in 5 years... more with overtime, profit share checks etc... and if this happens, so we can hopefully sell our home and walk away with $150,000+ to use as a down payment on a new home which will leave us with a new mortgage of $150k-$200k which we could then afford with our income and no daycare payments.
If I get a promotion in 5 years, even better... but for now its looks like i'll be hanging our with Dave Ramsey and doing the debt elimination plan.