[USER]

Looking for financial advice. We bought our home in 2020 with a 3% rate. We do not like our town and the schools are terrible.

We have 3 kids and make about 8k/ month however we do have some medical/credit card debt totaling 30k.

Unfortunately wjth the debt, child care bills and car payments our expenses are about 6500+/month.

We want to move to a better city 30 min away for better schools and quality of life.

We want to sell and will net about 100k to put towards a new home(5-6% mortgage tho) and pay off debt and ideally start over financially.

We are both in our 30s so younger in our careers I am only working part time with the kids right now so my goal is to one day make more and pay down the new mortgage faster.

Everyone says don’t give up the rate but if it’s better quality of life for ourselves/kids we’re looking at pros and cons

[Karl]

Get rid of the car payments and medical/credit card debt as aggressively as you can. Use the debt snowball method if you’d like to.

Once you’ve at least paid off the medical/credit card debt, sell the house and use proceeds to buy in the nicer city.

Try to pick up side hustles and knock the debt out in a year or two, it’s possible! If you can get it done by end of 2025, I would expect interest rates to be 6-7% still, just a heads up.

Don’t let your current low interest rate hold you back from a life that is more fulfilling and tailored to your family’s needs!

[Lee]

they only pro in the house you have is the rate, find an assumable where you want to be a be set with no loses.

Sell before the market drops further. Of course depending on lacation.

[Corey]

Could you owner finance a new buyer and keep your mortgage? If they give you $50k down you could use that to buy the new home while the payment will cover your mortgage and help you pay down the new mortgage.

Or you could rent your current home out while keeping the mortgage.

[Cindy]

Have you looked on zillow or redfin to see how much the homes are going for in the area you want to live? They usually have the built in calculator to give you an estimated payment.

I would do that to see what the housing prices are with doubling your interest rate.

I’m sure there is a way to do it, but you also don’t want to be house poor. How old are your kids?

[Kim]

Your kids’ education is so important, make the move and call it a very the most important investment you will ever make…. for them!!

[Mercedes]

Hard giving up the rate but sounds like you’ll be on a good place when you move since you have so much equity.

Paying off the debt will eliminate that bill and be a net even probably with a higher mortgage.

[Josh]

What is your current mortgage payment? How much would the house rent for?

Can you afford the down-payment on the next house without selling this one?

[Christina]

Move! Life is more than a mortgage rate. Who is everyone? Are they paying your bills or living your life?

[Dean]

If you bought in 2020 you likely have quite a bit of equity in the home at this point. You should call the bank you financed with to see how much money they will give you based off your equity in the home and apply for a Heloc.

Then rent out the home to someone – likely at a higher payment then what your payment is and use that money to help with payment on new home that will have a higher interest rate/ payment.

Then try and repeat this process if possible. Now you own 2 homes and someone else is paying the payment while you’re pocketing the rest.

Example – I also bought in 2020 with 2.75% interest rate – the home was $690k back then and now appraised at 1.2M.

My payment is $2600 a month, if I were to rent this house out and move I could get 5-7k a month.

I applied for a Heloc, 2 or 3 years ago which I haven’t done anything with and it was $240k (I got the Heloc to cover a 120k margin loan but I never got called on it thankfully

[Christine]

How many years do you have until you hit FI? That should factor in. If you have MANY years, then move, enjoy your life, you have decades to save.

If you are close to FI, stick it out.

[Lauren]

Would it be possible to rent for a year or two in your desired community for a similar cost of what you are paying now while you wait for interest rates to come back down?

If so, consider selling the house, pay off the various debts and build up a great downpayment fund for when the rates come back down.

Would you be willing to live in possibly more cramped space to make that transition to the better location?

[Jo]

Take care of your finances before you move. Pay off all your non mortgage debt.

[Abbie]

Putting your $1500 extra towards the medical/credit card could get rid of that pretty quickly.

Assuming some of it is getting paid down by your minimum payments, it shouldn’t take much longer than a year and then you’re in good shape to make a move with less committed monthly expenses.

[Dena]

I feel like you should focus on getting more savings before making a move. That said, if you’re moving to a much cheaper area with a much lower mortgage payment, then I’d be comfortable doing that now.

I was always taught two things when I was young that I feel is the best advice ever:

1. Never have a car payment
2. Never use home equity to pay off bad(unsecured) debt

Not sure what your issues with your kids’ current school are, but have you looked into getting your children into a different/better school with you transporting them yourself without moving?

If it were me, I’d do everything I could to keep the home you have as a rental, but that’s just me.

My goal was to have a home to give one to each of my children, so they’d always have some passive income coming in.

[Michael]

I wouldn’t be so hasty to forfeit a 3% mortgage in a “higher for longer” environment in which inflation is heating up again.

There is always something that comes up:repairs are costly, property taxes are ridiculous, and there’s a possibility that your kids won’t like their new schools,either

When I was a kid,the closest middle school was in the hood. Some could barely read and write. Others were getting pregnant at 13. Robberies were common.

It didn’t cross my mind that my parents should’ve moved so that I could’ve went to a better middle school.

The closest high-school, on the other hand, was in an upper middle class neighborhood, a stark contrast to the horrible middle school I went to.

I was a straight A student with multiple scholarships I turned down so I could go to the top university in Canada

I also graduated with honors and a A- GPA at the university level.
The university education wasn’t even used. It hindered my parents’ retirement.

It hindered my ability to save money early(I did not have a work visa,so I couldn’t legally work).

And it was ultimately a 500k dollar education shaved off the top for an education that was never used.

It would’ve been more money in everyone’s pockets had I completely skipped it.

My younger brother who simply started working hard early in life (before opening his own plumbing business) is approaching the 1 million dollar networth level with zero debt.

Me-the one with brains- is 300k-400k behind him.
Money isn’t everything but school is not what it used to be. When I was a kid, having a university degree was a must for a good

resume, even if the job was in a completely different field.
In 20 years, everyone in your family could look back and think of how irrelevant the school aspect was.

For a university education, the name of the school matters. For everything else, it’s not that relevant.

I would only move if I thought the property value and neighborhood was in decline.

[Gordon]

If the new city offers better schools and maybe also better pay, then the % rate would not outweigh staying in the existing house.

Not sure if you have savings, but I would have tried to first take the time to buy a great next house first, update it as needed, and only then sell the current house.

[Author]

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