Selling house, probably underwater

[Anonymous]

I would stop prepaying your existing mortgage, and keep the cash to build you emergency fund.

[Anonymous]

OP - I get what you're saying about renting your place out, but you are (i) prepaying your mortgage significantly, and (ii) paying for childcare costs not. If you can rent the place out for enough to cover the mortgage and HOA, and eliminate those two payments, you'll have a significant cushion against rental vacancies. That should be enough to allow you to save enough so you can sell the house if you want, and to weather any vacancies until your current lease runs out and you move back home.

[Anonymous]

12:04 - We have a 35k emergency fund - a level which I think is sufficient for us.

12:10 - If we rented out our house we'd be able to cover that mortgage and HOA, but would pick up a montly rent instead, which I assume would be equivalent, or not a substantial savings (based on a quick online scan). right? So the only amount we'd have extra every month is child care, saved by going to public school. That's only $900/month, which I dont see as a way to quickly build up our savings .... am I missing something?

[Anonymous]

I would not lock in your losses at this point, unless you HAD to.

[Anonymous]

OP: I believe that was previous posters were saying is that they assume that your mortgage payment for the home you own is likely not that much more than $900/month. You can save that money in case a renter breaks your lease.

[Anonymous]

let's look at cash flow

$900/month = current child care cost

? minimum mortgage payment

? additional amt you are paying on the mortgage

? home owner fees

? rental income from your exisitng home

? minimum to rent in desirable school district

Also, don't forget that if when your child starts in public school and/or private school that is only 9 -10 months of year. Summer camps can be a significant expense for those other 2 -3 months.

[Anonymous]

Anonymous wrote:12:04 - We have a 35k emergency fund - a level which I think is sufficient for us.

12:10 - If we rented out our house we'd be able to cover that mortgage and HOA, but would pick up a montly rent instead, which I assume would be equivalent, or not a substantial savings (based on a quick online scan). right? So the only amount we'd have extra every month is child care, saved by going to public school. That's only $900/month, which I dont see as a way to quickly build up our savings .... am I missing something?

Yes - you've been aggressively pre-paying your mortgage. You should stop doing that, at least initially. You'll be at about a break even between rent and mortgage/HOA. So, you can save the $900 in childcare plus the extra principal payment each month - total of about $2000 per month, if not more. You can ramp up the mortgage prepayments if you want agains after you have enough in separate savings to cover however many months of rental vacancy that make you comfortable.

[Anonymous]

Are there private schools around here that are only $900/month?

[Anonymous]

Anonymous wrote:Are there private schools around here that are only $900/month?

parochial

[Anonymous]

Honestly, I'd stay put for another couple of years, start saving more aggressively (not prepaying your mortgage but saving - if you then want to sell instead of eventually rent out your house, you can prepay with your savings) and suck up the public school.

How bad can the public school really be for K and 1st grade? I think it would need to be a safety issue (which I bet it isn't) for me to say that it is better than a parachial school. What is it exactly that you aren't impressed with re: teachers/school?

I personally don't think $35K is an awful lot of savings, especially when you are under water on your mortgage. You are doing more for your child if you save and send her/him to public than if you shell out $$ for what is probably not even that better of an education.

[Anonymous]

Anonymous wrote:Remember with brokerage fees (6%) and closing costs, you'll be even more underwater than you are now.

In this market, OP should have no problem negotiating a seller subsidy for closing costs.

[Anonymous]

If you like your house, stay put and pay for private. All of these other options sound like huge hassles. You have to consider your sanity too when you're deciding what to do.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Remember with brokerage fees (6%) and closing costs, you'll be even more underwater than you are now.

In this market, OP should have no problem negotiating a seller subsidy for closing costs.

I think pp was talking about OP selling.

[Anonymous]

Anonymous wrote:Honestly, I'd stay put for another couple of years, start saving more aggressively (not prepaying your mortgage but saving - if you then want to sell instead of eventually rent out your house, you can prepay with your savings) and suck up the public school.

How bad can the public school really be for K and 1st grade? I think it would need to be a safety issue (which I bet it isn't) for me to say that it is better than a parachial school. What is it exactly that you aren't impressed with re: teachers/school?

I personally don't think $35K is an awful lot of savings, especially when you are under water on your mortgage. You are doing more for your child if you save and send her/him to public than if you shell out $$ for what is probably not even that better of an education.

That was my thought as well. Why not give the schools a chance while you get into a better financial position?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Honestly, I'd stay put for another couple of years, start saving more aggressively (not prepaying your mortgage but saving - if you then want to sell instead of eventually rent out your house, you can prepay with your savings) and suck up the public school.

How bad can the public school really be for K and 1st grade? I think it would need to be a safety issue (which I bet it isn't) for me to say that it is better than a parachial school. What is it exactly that you aren't impressed with re: teachers/school?

I personally don't think $35K is an awful lot of savings, especially when you are under water on your mortgage. You are doing more for your child if you save and send her/him to public than if you shell out $$ for what is probably not even that better of an education.

That was my thought as well. Why not give the schools a chance while you get into a better financial position?

They can be pretty bad. If we hadn't gotten in to a charter, we'd have paid for private or moved. There's no way in the world I'd have sent my kid to our in-bounds elementary school. It's about 150 feet from my house, and I see the behavior of the students every day. No freakin' way.