Anonymous wrote:If you are priced out in a year, but have to do all of the things you are doing now to stay in the school district, I think you're priced out now. It's ok not to be in the tip top school districts. It's ok to have a mediocre kitchen.

I think so too. OTOH, past performance of the real estate market does not predict future results. We are very, very, unlikely to continue seeing large gains every year. Especially if interests rates go up.

As long as you really do catch them up. The thing is though, life has a way of getting in the way of stuff like that. It's kind of a risk.

What did you decide, OP?

I'd put home improvements on the bottom of my priority list particularly if it's a "forever" home. Equity you build is not useful unless you sell the house. I'd not borrow from TSP, I'd continue kids ed fund first before home improvements.

Anonymous wrote:The house is a wise financial choice because it will allow us to stay with good public schools through high school, and not have to pay care providers to shuttle our kids all over the city. In a year, we'll be priced out of the neighborhood.

This is the sound of the bubble filling. Going into retirement because "I must buy now or be priced out in a year," then banking on appreciation.

mortgage payment will be 3600/month.

At this price point you have lots of choices.

Don't know why you've decided to make it uncomfortable/stressful

I have been in your shoes, took a 50k loan from TSP when we bought. I don't totally regret it but I wouldn't borrow to redo a kitchen, maybe for the attic and basement.

A $3600 mortgage payment, even if that is PITI, seems pretty high unless you have no student loan and car debt. We have slightly lower income and slightly older kids and also put in $250/month each, and I don't think it's enough. That extra money goes to swim lessons, music lessons, summer camp, etc. as our children get older it's more enjoyable to travel and eat in restaurants with them. All of this is optional, but if you are buying in an area with good k-12 schools there are probably a number of affluent families who do all this and more.

If you are priced out in a year, but have to do all of the things you are doing now to stay in the school district, I think you're priced out now. It's ok not to be in the tip top school districts. It's ok to have a mediocre kitchen.

If the numbers work, then it works. Everyone has their own degree of risk love or aversion. Personally, I would not borrow from a TSP or be comfortable with 10 percent equity, but that isn't relevant for your decision making.

I think you are overextending yourselves. With your HHI, you should be able to pay a mortgage and save for college. However, if your incomes are likely to continue to increase over time, then it is worth a bit of sacrifice on the savings to get that house.

I personally think pulling funds from your TSP is a poor financial decision. I think holding off on saving for college is fine. Honestly, to make this many sacrifices (retirement & college fund) means this house is too expensive. I actually think your retirement savings is low for your age.