When the money rules don't apply

Tails: The issues

What in the world were we thinking? Why spend money on a house right now, when we were getting by in the house we had?

Why spend that extra freelance money on closing costs when we could bail out of the deal and use the cash to finally pay off our remaining $6,500 in debt in full, plus boost our emergency fund and finance a Roth individual retirement account for my husband?

Why not make the prudent decision, the simple decision, the decision that would make the most financial sense?

And given the state of the real-estate market, we couldn't hope to put our current home on the market, which means we would have to rent it out. What if we didn't find a renter? What if we had to pay two mortgages?

Heads: The math

The new house actually offered tremendous value that we couldn't discount:

• A 1914 foursquare with original details, including an old stone fireplace, the house was in mint condition and would be a terrific investment.

• We also stood to save a good $5,000 a year in repairs (that's about what we put into our current money pit).

• We have done all we can to improve our current home short of tearing it down and starting from scratch. And barring a gold rush real-estate boom in our tiny town, its value won't rise much more. Financially, it made sense to move on, rent for now and sell when conditions are a little more favorable.

And a bit of luck makes the call

Not only did we find a renter to cover the costs of our current home, my husband found a part-time job that pays . . . between $400 and $500 a month.

And just before we closed, the interest rates slipped for a nanosecond, just long enough for our lender to reduce our rate by half a percentage point. Our new mortgage payment was eased by about $50.

In a perfect world, the story wouldn't have included any hand-wringing or late nights with the calculator or my husband scrambling for work while we prayed for a responsible renter to arrive.

But sometimes -- often, I find -- life isn't perfect. All you can do is aim for the best situation while balancing the financial and emotional costs.

• Video: Buy your first home in a year

We could have walked away from the deal. Some people might argue that would have been the most financially prudent move. We could have saved our money until the timing was right. "There will always be another house," we reminded each other at the moments when we considered backing out.

Then again, our crazy financial leap of faith has yielded many blessings: a proper home, an office for me, space for guests (key when you live far from friends and family), plus a new direction for my husband and no more weekends at Lowe's!

Priceless.

Published Dec. 26, 2007

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