[USER]

My husband (40) and I (38) live in a MCOL area in CA. We have a 15yo, 5yo, 3.5yo, and 1.5yo. No family nearby.

We make $309k/yr combined plus potential $50k/yr in combined bonuses. $50k of base salary is very new.

We purchased our home in 2016 for $356k and it’s worth roughly $580k now. We owe $202k because we do biweekly payments and for a while were throwing extra payments on it.

Two years ago my husband got a job a few hours away, near the Santa Cruz area doing 2 days a week in office, staying with his mom for one night, coming home late the next day. The intention was to move to be near his family but the market is insane there.

His job is pushing more days in the office so it feels imminent that we will need to move but have been trying to push it off as long as possible.

The million dollar homes we look at are often too small or need a lot of work. We couldn’t afford daycare there so his mom would watch the non-school aged kids.

We really don’t want to sell our house and want to rent it out because that seems to make sense financially long term. We’re about 13 years out from paying it off.

But the problem is… houses that check most boxes are $1.3-1.4m and I have mentally capped us at $1.2m because the payment would be 60% of our take home pay and we’ve only been able to save $230k for a down payment so would have to either do a HELOC or take a 401k loan to make up the rest plus closing costs.

We have just been so comfortable financially, taking nice vacations, not worrying when things break, buying whatever groceries without worrying, etc. I know we are super privileged.

We want to move to build the family bond, more opportunity to enjoy being outdoors (better weather), be near the beach, etc. We are trading financial flexibility for family and weather. we are both afraid of the risks.

Is it stupid to sell the current house? Is it stupid not to? Is it stupid to move at all?

Would appreciate insight from anyone who has done something similar or thoughts on it. We can’t stop overthinking it.

[Kaj]

Just a suggestion for a work schedule. If possible can he drive Monday morning work Monday Tuesday, drive home Tuesday night. Home all day Wednesday. Then Drive Thursday morning work Thursday Friday. Drive home Friday night.

This is a plan to work 4 days a week in person but only be away from the family two nights.

I knew a woman who had that schedule.

Maybe even alternate weeks to start.

[Rosemarie]

As long as we have Prop 13 do not sell a California house.

Pay the extra 10% for the house you need and give up the vacations for a few years, I’m sure you can cut back in a few areas to come up with what you need.

There’s a very good chance interest rates will go down in the next few years and you could refinance and have a payment lower than the 1.2M that you are comfortable with.

You would regret selling your current house in a few years when it’s worth over 1M. Stretch things for now and see how it goes – you can always sell the house at a later date if it becomes too much.

[Austin]

Santa Cruz here. We all have to get creative with housing. Don’t buy in the mountains (Felton, Ben Lomond, parts of Scotts Valley and Aptos) without making sure you can get homeowners insurance (there are zero new policies being written for anyone close to fire risk areas). Don’t move to south county (Aptos and Watsonville) unless you’re aware of the traffic pattern and how it will impact you. That said, almost anywhere in the county is a max 15-20 min drive to beautiful beaches.

I’m in Scotts Valley and I love it, but I do rent out space in my home to make it work. Thankfully I have a studio above a detached garage that’s always rented and helps with the mortgage. If there’s an option to get a little extra space and rent it being a landlord in Santa Cruz area is super easy because most people can’t afford to buy. Renting out a room gets you $1k-$2k/mo.

$300k should be doable in Santa Cruz, even if it stretches your budget a bit, because the area will always be desirable and your home will appreciate quickly.

[Shaun]

Have a you considered renting for a bit while renting out your current home? 60% of income sounds like a lot.

[Monique]

I’d prefer to keep the house, but under these circumstances, unless it can be rented for a significant amount to supplement the mortgage on the new house, you may have to sell it.

[Author]

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