I live in a working class neighborhood. I have 12 years left on a 5% 15 year mortage and owe $180,000. My payment is less then $1,800. By just making my mortgage payement I will payoff about $10,000 a year of my mortage for the next 10 years. A house like mine down the street sold for $400,000 this month and mine should do the same.

My town and neighborhood is going down hill and the schools are getting worse. I feel like I need to get out. A house like mine in a more affluent neighborhood in the next town will cost me $500,000. The house I really want will cost $550,000 to $600,000. Real eatste prices have exploded in my area. I am on the low end of it gaining only 100% appriciation over the last 5 years. Most have gained more. It upsets me that I will be paying $550,000 for a house that someone bought 3 years ago for less then $300,000. I also don’t want to lose my pool that I put in 3 years ago.

I understand that the more expensive house will appreiciate more, but it seem like we are at a time where we will not see significant house appriciation for 5 to 10 years.

It seems like a bad more to give up the 5% mortgage with 12 years to go to pick up a 30 year mortgage at 7% with a $3,000 mortgage payment.

I have 3 kids and plan to send them all to college.

My plan (choose one)

A. sell my house, move to the more affluent neighborhood with better schools and have a $3,000 mortgage payment. With $25,000 of mortgage interest, the payment will only feel like $2,500 because I will adjust my withholdings. The cost will also be offset by extra pay (about $300 a month) working in the new area. So the new payment will only feel like $600 more then right now.

B. Rent my house, (I think I could get $1700 or $1800) then rent a house for me to live in where I want to raise my kids. This would alow me to have my kids go to better schools, and keep my good mortgage situtation and keep the $24,000 I would have paid in real estate comission if I sold it.

C. Stay, Put my last 2 kids in private school if they do not get into the local magnet school. My oldest is in the magnet school. I could bank the extra money I would have paid if I bought a bigger house to save for College.

D. Do plan C, with the thought that I would sell the house in 3 years when I owe $30, 000 less, maybe make extra payments to get it down to $50,000 less.


I really do want to leave the town I live in. My family take home pay is $7,000 a month.

Does anyone have any advice?
Is there anything I am not considering in these plans?
Does one stand out as better then the others?