Don’t overlook property taxes, which can be a significant cost with new builds.
Avery said:
Don’t overlook property taxes, which can be a significant cost with new builds.
Are you also paying HOA fees?
Avery said:
Don’t overlook property taxes, which can be a significant cost with new builds.
Are you also paying HOA fees?
Yes, but it’s mostly for small amenities in a luxury area. The cost feels excessive for what we get.
Jumping from a $180k home to over a million is a huge leap.
Bowie said:
Jumping from a $180k home to over a million is a huge leap.
It definitely feels like a big step.
The equity you build in the new home over the next decade could surpass what you’ve gained in your current home. If the finances work out, it sounds like a good move.
Adding the in-law suite is a smart move for many reasons. It not only meets your current needs but also makes your home appealing to future buyers who might be in a similar situation.
Tal said:
Adding the in-law suite is a smart move for many reasons. It not only meets your current needs but also makes your home appealing to future buyers who might be in a similar situation.
That’s an excellent perspective, thanks!
It all depends on your spending habits and lifestyle. From what you’ve shared, it seems like a manageable situation with the down payment you have.
With $450k down, your mortgage should be very reasonable relative to your income. I’d guess your monthly payments, including taxes and insurance, would be between $5.25k and $6.5k. Considering your income, you should be saving significantly, possibly around $8k a month after retirement savings.
You seem to have a good head on your shoulders and a solid approach to this decision. It sounds like you’ll manage just fine.
Interest rates may drop again in the future. Taking a risk now could be beneficial, especially if you can rent out the in-law suite later if needed. It’s good to have options.
How large is the new house to cost $1.1 million?
Joss said:
How large is the new house to cost $1.1 million?
The house is 4600 square feet with five bedrooms, five bathrooms, plus a separate in-law suite with its own bedroom, living area, kitchen, bath, and laundry.
You could probably qualify for even more based on your income.
Try to keep your current property with the low interest rate and consider putting less down on the new build. Renting out your old home could cover its costs.
I think you’re making a risky move. If your income is as high as $350k, you should have paid off the first home by now. Upsizing this much could be financially dangerous if your income is unstable. Consider expanding your current home instead.