March Mortgage Update and does any of this really matter?

Mar 01 2012 Published by under Uncategorized

The first of each month or thereabouts, #1 updates the blog on her mortgage situation.  Why?  Because personal finance bloggers dig that sort of thing and were in favor of it.  Each mortgage update is followed by a contemplation on housing or family budgeting, sometimes personal, sometimes more general.  This month is the former.

Last month (February):

Balance: $109,293.86
Years left: 9.416666667
P = $776.50, I =$437.91, Escrow = 726.93

This month (March):

Balance: $107,953.41
Years left: 9.25
P = $781.78, I =$432.62, Escrow = 726.93

One months savings from this month’s prepayment:  ~$2.22.

So... got signals that DH's tenure case is not very good.  He is unlikely to be tenured.  He considered withdrawing his packet, but apparently if he does that then he's out of a job in May and we kind of need his salary for next year.

So what does this mean?

Well... we have some choices.

We can live on my salary alone.  We'll have to make some cuts, especially to our saving.  DH could then do something like long-distance consulting or just devote himself to pursuits that don't make money, like volunteer work or taking classes etc.  We're in a small town and the nearest city is pretty far away and doesn't really have the kind of industry he works in either.  He's also not particularly interested in going the administrative route at the uni.

We can go on the market again.  He doesn't want to work at a university, but I could get a different TT job in a city that has his industry.  Unfortunately there are only 3 cities that have his industry and only one of them is an area I could get a TT job at.  And that one place... it's in a part of the country I would prefer not to live.  (Sorry, I just don't like the East coast much!)

We can move out to California.  DH could work in industry in his field and make a big salary.  Sadly there are no think-tanks in the SF bay area in my field that are any good to work at (one of them has a reputation for being a horrible work environment, and the other is a 3 hour commute from anywhere DH would be likely to work).  The SLACs and CalStates are also unappealing, first because they would be unlikely to hire me (I have pedigree from the wrong coast!), and second because their pays are low and their teaching loads very high.  So really that leaves trying to get a soft money position at one of the big named schools in the area (since although awesome, I am not awesome enough to get a TT job at a top 10 school... I'm also too far from graduation for their post-docs).  This would be a drop in prestige, but in theory I could build up my cv without heavy teaching and service obligations, and in an environment with amazingly good colleagues.  It would also be an increase in risk because soft money positions can have gaps in employment and widely varying salaries.

We could also move out to California and I could completely ditch my career.  Try to get a job at Google or someplace like that doing I don't know what.  Presumably that would also involve a large salary for me.

We don't want to be apart for any longer than 3 months.  We talked about maybe him doing a 6 month temporary position (sometimes industry does 3-12 month jobbers for professors) and we could live there over the summer and then he and DC could stay on and the baby/toddler and I could move back here.  But nothing longer than that.

Meanwhile we're getting older.

So here's the deal:

We could stay here and be perfectly safe.  Guaranteed employment for me.  Continue saving.  Pay off our house.  Have affordable daycare.  Pay for private school.  Etc. Etc.  We'd have to cut back some, but even without raises we're not doing too badly, even if I am underpaid.  It just doesn't cost much to live here.  I like my job.  I like my colleagues.  I know a lot of things about my situation are better than the average.

Alternatively, we could move to paradise and potentially make much more money.  But... small 3 bedroom houses start at 800K in the area we'd be looking at.  Rent starts around 3000/month (though if it is a same-gendered baby currently gestating we could probably make do with a 2br starting at 2500/mo).  School district suddenly becomes very important because private is so much more expensive.  (On the plus side, DC makes the age cutoff for California, so there wouldn't be any fight to keep hir accelerated in public.)  Buying a house, even with 20% down becomes a lot more risky... being potentially 200K underwater is a lot less scary than being potentially 800K underwater if a house can't be sold.  We'd need a very large emergency fund just to pay for the basics of housing and so on in case of a job loss.  There's the potential for great upside, but also risk we wouldn't have staying here.  And what if DH realizes he doesn't like working for industry as much as he would have liked determining his own hours in our small town?  I probably can't make a big enough salary to (comfortably though frugally) support a family in the SF bay area.

With the pregnancy I just want to nest.  Thankfully I don't have to worry about this decision for real for another year, and will presumably no longer be gestating at that point.  The future is an exciting but scary place.

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