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Buying home, lower cost or more expensive house.

16 years ago


We are considering putting our house up for sale and I have some questions. A litle background, I am 30 years old and my wife is 27 years old. We built as house on an acre of land my parents gave us 5 years ago. We love the house and hate to move but we have to for jobs. This is our first house. It appears we will gain about 70K in equilty when selling this house. The area we want to move into is closer to Atlanta therefore the houses cost more. Currently we are about 40 miles from Atlanta/Marietta. From my view we are looking at two options.

Option 1

Buy a home in the price range 190-200k, put down 70k and finance 130k and get no more than a 20 year loan.

Option 2

Buy a home in the price range of 230-250k, put down 70k and finance 160K-180K for 30 years.

Option 1 is appealing because we would lower our mortgage fom 25 years currently to 20, we would be able to buy a larger house also, the cons are the subdivisions are not as nice, and we have to skip out are more things we would like in a house.

Option 2 is appealing because we would be able to buy into a more upscale area which would likely increase in value and we wouldn't have to worry as much about the subdivision going downhill. We would also be able to get more house for the money in a nicer subdivision. The cons are obviously to afford this we would have to get a 30 year to be safe in case one of us loses our job for a significant period of time.

The main debate is in seems like for 50k more you really do get into a nicer subdivision with homes worth a lot more than a lower cost property we would be looking at. Is it worth the risk to guarantee the quality of the neighborhood and possibly come out with more equilty in the end from buying the more expensive property.

Thanks for any input..



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