I don't think the mortgage is the issue: it's moving to a smaller house in an area you don't want to be.

A 15 year mortgage is always a better deal, but only you know if you're comfortable with a 30 year one and a smaller house.

Sorry, I forgot to mention that with a 30 year mortgage, we could build the size house we would need. So it's stay where we are in the suburbs with the house paid off in 15 years, or move out onto 30 acres overlooking pasture with a longer loan. Tough decision...

Are you taking into account equity you'd get from selling your current house? Many markets are up right now too (I'm a Realtor in TX), perhaps you should consult a Realtor to make sure you are properly valuing you house.

Of course you are still left with the challenge of either taking on (and needing to qualify for/ have a down payment for) two mortgages or selling your current home and getting creative with living situations while you build.

Don't do it. We have 4 young kids, and I can't imagine downsizing and definitely would never take on a 30-year mortgage. We've been aggressively paying off our current mortgage and are a couple years away from owning free and clear.

Maybe once your kids are grown you could use the land to build a small retirement home (using proceeds from the sale of your larger current home).

We are both 50 and are going to downsize this summer. Our current 2,000sf is wayyyy too much house for us. We have one adult child who lives nearby. Our first "downsize" will be to a 900sf apartment for a while, until we decide what we want to do, where we want to go, what sort of house we want, etc.

Our plan is: when we do buy our next house, it will be our final purchase, and it will be with cash. No mortgage.

After our two children left home, we sold the big house and bought a smaller one in town. About 1700 sq ft. NO mortgage.

We did this at age 58. It is a very, very comfortable feeling. I retired at 60. DH could retire too, but he likes his job.

This is a very personal decision, though. Are you country-type people who would LOVE living by a pasture? Or, maybe you would want to retire there after your kids are gone? We moved to town because we wanted a smaller place next to the golf course, because that's what we love.

I see all the advice about mortgages and length and wonder where the part about living comfortably happens.

I am 70(LOML is 68), retired, and we just refinanced a 30 year mortgage into another 30 with half the interest rate. What that does is allow us to pay off current bills and the mortgage in 17 years(versus 22 years for the old mortgage), all the while being able to live comfortably and have extra $$$ for medical costs---which , at our age can suddenly become important.

If you feel building is the better long term solution, do so. Plenty of time later to ask 'What If?'

If we had stayed in the house we built in 1978, we'd be debt free----but would have been miserable the entire time, since none of us liked the house, neighborhood or city.

Do what is best for your family.

Having a 5 year old in the house means you're still young so I wouldn't be afraid of a 30 year. Plus, as previously mentioned are you taking into account any equity? As you're children rely less on your money and as you make more money you can always make extra payments or refinance to a shorter term.

I would be far more afraid to build on family land and have it not be the right fit for your family. You'll feel obligated to stay there even if the house is way too big, way too small or just too far away from town. You can't just sell it and start over, at least not without causing some divide within the family.

Sort out what's truly important to you. Taking out a 30-year mortgage at your life stage is hardly a big deal. So what's most important:

--Where and how you currently live (with a 5-year old, you'll have another 13 years before high school graduation and with a 17-year old commuting to a near by college you may never lose him/her)

--Where and how you could live if you moved and built (is the new location and schools an improvement over current location; would a larger house be a major improvement)

--The current monthly expense of your existing mortgage (does the current monthly payment create a constant monthly financial/cash flow burden)

--The future monthly expense of your potential new mortgage (does a new 30-year mortgage offer important monthly financial/cash flow improvement)

With kids growing up over the next 13 years and needing braces and glasses; paying for auto insurance; etc., I would think the monthly cash flow over the next 13 years would be much more challenging than striving to pay off your current mortgage so you can live mortgage free in 15 years.

Moving to a new, but smaller house seems to have little or no advantage, unless there are major expense items looming for your current house or there are location issues related to your current house. If you are going to build, build what you will need.

As long as you can qualify for a new mortgage, and have the means for whatever necessary down payment, fees and permits related to a new house, a 30-year mortgage is not unusual, especially if the monthly payments would be less than you currently pay.

Good luck!

How do you feel about your lifestyle in the suburb? How would it be different on the land? Are you where it is convenient to get your kids to and from school and activities? Drugstores and grocery shopping? Friends? When we were house hunting I wanted to be within walking distance of at least one of the schools. Sometimes I wish we'd moved closer to town center and the middle and high schools!

If you have a 30 year mortgage from 15 years ago, it means you're paying somewhere between 7.16% and 6.17%. On average let's say that your mortgage is 6.50%.

Current rates are 3.99%.

In 2002 the median sales price of a house was $228,700. As of Dec 2016 the median sales price of a house was $322,500.

Figuring in both cases a 20% down payment here's how it works out.

2002:

House: $228,700

Down payment: $45,740

Financed amount: $182,960

Mortgage rate: 6.50%

Monthly payment on 30 year loan: $ 1,156.43

2017:

House: $322,500

Down payment: $64,500

Financed amount: $258,000

Mortgage rate: 3.99%

Monthly payment on 30 year loan: $ 1,230.24

Frankly even if you stay you need to refinance your mortgage and get the lower rate. Then you can use the extra money to pay it off faster each month. Or if you want to move, it's obvious that for the same monthly payment you can build a larger house.

Only you can figure out which would work best for your family, but don't let the thought of a mortgage scare you off. My Dad was 86 and still had a mortgage when he sold his house and he did quite well financially throughout his life. He always felt it best not to use his own money. LOL. As long as you can afford the mortgage payments, don't be put off by having a mortgage.

I would post your question also in the buying and selling a home forum where some of the real estate experts hang out. They can explain better as to why one way or the other is a better choice.

My first question is, just how old are you? Initially I read this as, You're mid-30s, and I thought, I hope that's not mid-life for you! If you're 30-something, no problem. If you're late 40s or 50s, though, I'd be hesitant to take on a 30-year obligation that would last into retirement.

Second, you need to decide what it is you want for your family. Will you be best served by moving to the country, or by staying where you are? What schools will your younger children attend? If you go to the country, how will that affect your future teens as they begin driving /want part-time jobs, etc.? Will other family members be building on this land? How will that affect your kids? Bottom line: Decide what's best for your family, and then move forward. That "best" will include finances, but finances aren't the only aspect of the equation.

Keep this in mind too: You don't have to jump right now. That land will still be there in a year, five years, ten years. You might decide that you need to stay where you are now ... but plan to build in X number years.

And a final thought: Taking on a 30-year mortgage doesn't mean you must pay on a 30-year schedule. When we were young and just married, we took out a 30-year mortgage ... but we paid on a 15-year schedule; in the end, we paid of the house in 11 years. If you set out to do this, make SURE you take out a loan with no prepayment penalty.

And a final-final thought: Your dad's giving you this land upon which to build. What if you live in the house 10-20 years, then you want /need to sell? Is he okay with that?

Thank you all for this great insight! You have addressed many issues that my husband and I have spent much time going back and forth about. I have quietly harangued over many of these aspects. But here's why the move is attractive and doable - I am early 40s, my dh is almost 50, we homeschool, so schools aren't a worry right now, and the ones in the area are fine if we're unable to homeschool some day, but we're happily in it for the long haul. Also, a bypass is being built, to be completed next year, which ends not far from where we'll be, and we would anticipate growth in the area, some of which would be welcome! Since we built our house 16 years ago we've refinanced twice and have a very low rate (last refinance was 2011) and we refinanced for 20 years. We would be putting around 35-40% down on a new build, depending on what size house we go with. A 30 yr mortgage would make our monthly payment easy, a 15 yr would make it rather tight. I've run the numbers till my eyes are crossed! We also want the house size to be able to accommodate our adult kids visiting and hopefully tons of grandkids eventually! Our oldest wants to live at home and commute so she doesn't graduate with a ton of debt, but she understands our stipulation that they can live with us while in school, but then need to stand on their own two feet. ; ) So, the main issue is the 30 yr mortgage at this stage of life, but like someone else said, the thought of staying in a neighborhood forever is not our desire, debt free or not. You all have confirmed our thoughts, instead of fearing the length of the loan, commit to pay it off early.

As for my father, he frankly doesn't care what we do with the land after he passes; he's living his dream by getting it ready for horses in a year or so. He's 71 and putting in fence posts - 1000 more feet to go across the front! (I worry about him, but he says he's fine, that if he dies doing it at least it was while doing something he loved!) But, we are treating this as our last house and have no plans to sell but desire to keep it in the family. It's become very special to our kids. (I know that when push comes to shove necessity can override sentiment though!)

Thank you all for the great feedback! Looks like I'll be posting a few houseplans to pick your brains over because darn if I can find the 200 ft discrepancy between the 2!

If a 15yr is too tight, I certainly wouldn't do that, but as another poster said, you can create a 20 or 25yr mortgage by paying a little more each month (which goes towards the principal). Many banks offer a bi-weekly mortgage, in which you pay 1/2 of a normal monthly payment every other week, so you essentially make an extra mortgage payment each year (26/2=13). It brings it down to about 25yrs, and they usually cut 1/8th off the rate.

With rates at historical lows, you'd be foolish NOT to take out a 30 year. Many mortgage companies will allow you to make a large payment and then rebalance the loan and change the payment if something changes. You can always pay ahead. You can pretty much tailor a mortgage to the ebb and flow of your needs (college, empty nest, wedding planning, inheritances, etc)

If rates go up in a few years - you'll make money in the BANK. Your investments will easily beat this.

In your golden years, depending on your 401k / IRA / retirement / savings / SS, etc - honestly - a mortgage payment - that is a FIXED cost is likely going to be the least of your worries. Medical expenses will likely seriously outpace any spending for housing. Additionally, if your house increases in value, you'll continue to build equity.

"...Medical expenses will likely seriously outpace any spending for housing..."

Amen to that. Prescriptions, tests, a dozen different specialists, unexpected hospitalizations...

Get your medical insurance in shape.

Your mortgage is really immaterial...as long as the monthly payment is within reason.

I'd want to pay extra on it simply to free up more money down the road, but then there are balances with what that extra money could be doing investment wise if not used... depends how you want to handle your finances. If you are ok now, you can always choose to downsize later on.

With interest rates so low, why would you not get a 30 year mortgage? You could always pay it off early if you want. I dont think your age is prohibitive from securing a mortgage.

No, your age is not a concern when getting a mortgage. Not a concern to the LENDER, that is. Ever hear of Age Discrimination?

No, your age is not a concern when getting a mortgage. Not a concern to the LENDER, that is. Ever hear of Age Discrimination?

I don't think the OP would have any legal problems obtaining a mortgage, but the law often allows things that are not wise. I think the real question concerned the wisdom of a potential mortgage.

I think the real question concerned the wisdom of a potential mortgage.

I know it seems it should be the real question, and paying for a mortgage is part of the conversation but it is only part. Would you rather have a $250,000 house with no mortgage or a $500,000 you owe $100,000 on?

You can pay me now or you can pay me later, but you can't take it with you when you go. Might as well have what you need (and want), while/if you can afford it.

I'm really amazed at how many people are so blasé about having a mortgage when you're on a fixed income. We're debt averse, and ours will be paid off in 5 years. I'm 40, and looking at my parents who are still paying off a mortgage in their 70s. My husband and I are facing the fact that we'll most likely be helping fund their retirement just as our kids hit college.

A mortgage when one is on fixed (retirement) income is just another monthly expense. Either one can afford it or one cannot. Therein lies the fundamental answer to the OP's initial question.

Banks are really good at determining eligibility for a mortgage.

A mortgage when one is on fixed (retirement) income is just another monthly expense. Either one can afford it or one cannot

And quite honestly if you can afford it, it's now cheaper to have the mortgage and invest the money.

I agree with everyone else - my father is an attorney and owns quite a few income producing properties. In his late sixties, he made a couple of offers on million dollar vacation homes a couple years ago, which were to be financed through a mortgage. (He ultimately decided he works too much and wouldnt use a vacation home). He also takes out commercial loans for properties. At his age, taking out a mortgage did not bother him. With interest rates so low, he is able invest his money in income producing stocks/properties/investments. I dont know what the jumbo loans are at now, but over the last few years, the rates have been crazy low. As long as you can afford the payment, I would not worry about taking a mortagage out.

Not everyone has the same definition of "afford." If we had taken out the mortgage we could "afford" in 2006 we would have been totally screwed in the recession.

Not everyone has the same definition of "afford." If we had taken out the mortgage we could "afford" in 2006 we would have been totally screwed in the recession.

Mortgage rates back in 2006 were in the 6% range and what you could invest it in wouldn't have made sense back then. However we got a rate under 3.5% for our mortgage and investing the money definitely is paying more than our mortgage. However one should never gamble with money they can't afford to lose. And if investing you want to make sure you can afford to live.

I am in my mid 40's and my husband is in his mid 50's. We don't have a mortgage on our primary home. We have 5 rental / investment properties in which only one has a mortgage of $100,000 total. Silly for our age to have a large amount tied up in real estate? Maybe but we feel we already have enough money invested in the stock market and the properties are income producing and have been appreciating. We've been using the income to save and invest in more property. So far, for us, it's the right decision.