Why We Feel Under Pressure To Buy Another House

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Mr. FAF and I went on a Friday night date two weeks ago.

We went grocery shopping and dropped by a Taiwanese cafe where Mr. FAF got a bento box for $10, and I got a green tea with boba for $4.

(Baby FAF and I had already eaten dinner before Mr. FAF got home from work. Our date cost $18 in total including tax and tip).

Mr. FAF and I were sharing the fried chicken from the bento box when he suddenly looked up and asked me in a serious tone: “Do you think we can buy another house in Northern Virginia later this year or early next year?”

I looked at him in surprise: “What? Are you serious?”

On our way to the Taiwanese cafe, Mr. FAF shared with me that he had heard a rumor that a big tech company might open a huge office in Northern Virginia in the near future.

Besides, the local government is expanding the Silver Line (Metro) in the DC area and is scheduled to complete the project by 2021.

If you know DC well, you will also know that living near a metro line is golden and adds a ton of value to your property.

Related: How To Navigate The Housing Market In Washington DC

Our plan to pay off the mortgage

I have talked about our aggressive plan to pay off our mortgage balance by the end of 2019.

Over the past couple of months, instead of putting only $2,000-$3,000/mo towards the mortgage principal like what I had discussed, we have consistently put about $6,000/mo on top of the monthly mortgage payment.

We plan to pause that temporarily once our baby is born in early September. Our emergency fund can currently cover 4 months of expenses. We’re still maxing out our 401(k) and 403(b).

As you can tell, we haven’t really upped our existing 4-month emergency by that much. But we’re just so thrilled with the idea of being totally debt-free!

If we don’t have any big emergencies or lose our jobs, we could very well pay off our one and only debt by mid-2019.

That leaves a window from mid-2019 to the end of 2020 for us to buy our second home. If we wait for too long until the Silver Line extension is completed, the housing market near the metro line will have soared up too high.

We want to make this not only our new home but also an investment (appreciation & rental potential).

I later found out that Apple had already discussed possible plans with the local government to open a huge office in Northern Virginia, which would further boost home value in the area.

We also think that during that mid-2019 and 2020 window, the tech giant mentioned above (besides Apple) might have also picked the winner city for their new office.

Even if Northern Virginia is not selected, the Silver Line extension alone is already enough of a reason to consider buying a house there.

The extension will make transportation in Reston, Herdon and neighboring areas so much easier for the techies working and living in Northern Virginia.

The current Amazon building in Northern Virginia is within a 15-minute walk from the new Herndon Metro Station. Amazon just opened another building on the other side of this station (it’s huge!). 

This new townhouse community is within a 5-minute walk from the new Herndon Metro Station. All of the units in this community have been sold although none of the townhomes are completed. 

Another construction site near the Herndon Metro Station. Mr. FAF said just a couple of months ago, this area was full of trees. 

Related: Rental Property After We Pay Off The Mortgage On Our Home

Criteria and plan for the new home

Sometimes I feel ok with staying in our current home for the rest of our lives. But in times when Mr. FAF insists we need a better house which will also serve as an investment, I do get excited at the idea.

Below is our plan for the new home:

1. Within 1 mile from the Metro station: Our first criterion is that the house must be within a 20-minute walk from the Metro. Our house is currently a 15-minute walk from the Metro, and we can definitely see what it does to the appreciation and rentability of the house.

2. At least 4 beds and 3.5 baths: That’s the basic layout of our current house, so we prefer to keep it that way or move up in size.

3. A finished basement or in-law suite that can be a rental: A house by itself is a liability. We would like to change that and have a rental unit attached to the house. It’d be ideal if it has both a finished basement and an in-law suite for us to generate some passive income. I now look at houses on Zillow and Redfin, and look specifically for such features.

4. Relatively new construction: Our house was built in 1975, and it does show the wear and tear from the past few decades. We would prefer our house to be built after 2000 and as new as possible to avoid or minimize the maintenance and repair headache.

5. Single family: We currently live in a townhouse. We have looked at newly built townhomes and prefer to buy a single family home since it has more space and privacy. We will also consider a townhouse that meets all of the criteria above and has a low HOA fee (below$100/mo).

The average price of a house that meets all of our requirements would be at least $600,000. That means that from mid-2019 to the end of 2020, we need to come up with $150,000 in cash for a 20% down payment, closing costs, and related fees.

We don’t want to borrow money from family or friends, so that $150,000 will be all on us.

Saving $150,000 over 18 months or $8,334/mo is mathematically impossible given our income level and monthly expenses unless both Mr. FAF and I move up the career ladder and get a big raise, which is unlikely to happen anytime soon.

Below are pictures of some of the places we’ve looked at:



Related: Why We Are Shopping For A Second House

Possible plans

Below are the plans we thought about that can make the purchase happen:

1.  Accepting to pay Private Mortgage Insurance on the home (~$190/mo) and lots of interest at the beginning of the amortization schedule

–> Cons: Paying almost $200/mo sounds painful to me, not to mention that almost $2,000 will go straight to the bank as interest (Down payment: $50,000; Mortgage: $550,000).

That’s not to mention all the maintenance and repairs that can come out of nowhere. I really don’t want Murphy to move into our new house (ever!).

2. Purchasing a new house and rent it out while living in our existing home

–> Cons: The mortgage rate for an investment property is higher than that for a primary residence, meaning we will pay even more interest to the bank.

Besides, given the median rent in the area ($2,700), it won’t even cover our mortgage, meaning we will have a negative cash flow on the house.

3. Take out a Home Equity Line of Credit (HELOC) on our current home to pay for the new house

–> Cons: This plan defeats the purpose of us paying off the house to have more security for our future. We don’t want a foreclosure on two houses at once and end up on the street.

To me, plan #1 seems the most feasible despite the high associated costs. If we can find a property with rental potential, it will help lower our mortgage payment. We can also rent out our current home and use the cash flow to further defray the cost of owning a second home.

Mr. FAF and I are not really into stocks, but we are really interested in real estate. That’s one thing we both have in common and seem to agree upon without much debate.

With a baby on the way, however, I find the thought of saving up and taking out a loan in the $500,000s extremely stressful.


Shizhuan gelatin & lamb kabob


Beef & ground pork noodles

We went to a Shizhuan restaurant after an afternoon of going to open houses in the Herndon/Dulles Airport area. It was $48.40 in total. Everything was delicious except for the noodles.

Related: How To Overcome Paranoia To Save Money


That night after we discussed buying a new house in Northern Virginia at the Taiwanese cafe, both of us just couldn’t fall asleep at night.

I stayed up until 1:30 AM feeling excited about our plan and thinking of every possible way we could make it happen.

The next morning, Mr. FAF and I both shared that we lost sleep over the plan and agreed we should take one step at a time and not get ahead of ourselves.

After all, we do have plans to move out of the DC area and have explored Austin, Raleigh, Pittsburgh, and Atlanta. So far, DC is still on top of our list since it meets most of our requirements.

The DC area has everything except for a big Google office for Mr. FAF (the offices Google has in Reston and Washington DC are for data centers, sales, and lobbying, according to him).

One thing I can’t deny, however, is that our plan to buy another more expensive house does motivate us to look in the same direction and save more aggressively to make our dream happen.

Sometimes I wonder what’s the point of living in a big house and sacrificing our wants at the moment. But at the end of the day, it’s not just moving up in housing and living a better quality life. It’s about investing in our future with real estate.

I told Mr. FAF that our current house will be for Baby FAF and the new house will be for our second baby. But Mr. FAF brushed that idea aside.

He said we should teach out kids how to fish instead of giving them the fish. The houses will be ours. Our kids will need to save up and buy their own homes. But deep down, I know that we will be happy to give our kids everything we have one day.

Our current plan is to work hard, save, pay off our mortgage balance, save for a down payment on a second home, and wait for the right opportunity/time to buy our second house whenever it might be.

We can dream all we want. But without action and money, nothing is gonna come out of that dream.


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25 thoughts on “Why We Feel Under Pressure To Buy Another House”

  • Oh wow, what a tough decision! I can see the upside of the Silver Line opportunity, but the financial stability of paying off your current home is very attractive as well. Sounds like you and Mr. FAF are a great team for making decisions though 🙂

    • It is indeed a tough decision. I really like that stability of being 100% debt free and owning our house outright. But given the potential of the Northern VA market, we might be passing up great opportunity if we’re just content with what we have. The good (or not so good) thing is that we don’t have the money to buy another house immediately, so we will need to sleep on it for a while 😉

  • Do you guys want to inquire with Guy on Fire about real estate decisions like this since he’s more experienced with so much of it and he’s in your area?

    I heard mass transit is phenomenal as long as it’s not too close or loud. That’s why we got our house where it is… except our project is delayed and we might fire before it’s finished if it ever gets finished! Lol but we’re bad examples.

    • That’s a great idea! I have the impression that GOF invests in a totally different market than us, but I’m sure he has lots of insights and a great list of contractors to work with.

      You’re totally right about the distance to public transit. If the house is too close to a Metro, it’s really loud and even becomes a target for burglary given that there are lots of random people walking around the neighborhood (speaking from experience >_<). It's ideal if the house is located within a 15-minute walk since it's walkable, but the noise and flow of people are not unbearable. I didn't know you guys live near a public transit under construction. I'm sure it will increase the value of your house a great deal in the future!

  • Wow, that’s a major decision — and an exciting one! Do you have a good idea of when the final/official tech company’s announcement will be? In the meantime, it sounds like you are doing an amazing job of chipping away at that mortgage.

    Good luck!!

    • Mr. FAF heard the rumor that the list has been narrowed down to 2 major cities. But it could very well be an unfounded rumor, and the company doesn’t have a set date in mind for their final decision yet. That’s why we feel even under more pressure to act fast. They can just announce their new office in a couple of months, and everyone would be buying houses in the area like crazy already.

  • Wow, 600k! That’s a lot of money. I thought a house is better priced in NC. My brother is moving there soon and will look for a house.
    I like #3. Why not borrow money while the interest rate is relatively low? 🙂

    • I think your brother will be able to find a great house in the 200s or 300s. That’s one thing I really like about Raleigh. But after we took a trip there last month, we’re not so sure about moving there. If we both get great jobs in Raleigh, then it’ll def be a possibility 😀

      A $500k loan might make me lose sleep at night, especially if there’s a recession like what Full Time Finance mentioned >_<

  • Some questions . You are looking to buy based on a rumor and a government plan for 3 years out. Have you considered what might happen in case of a recession? I could see all three of those events delayed for years. Would you be willing to sit on that real estate with no gains for a decade while the rest of your life may up and move to another state? One could argue today those properties are already priced to account for these potential changes plus the risk they may be delayed or canceled.

    I also question the newish construction part. I’ve found over the years you can get renovated older construction that’s just as low maintenance as a new home and costs thousands cheaper. Have you considered something like that?

    • I think those are great questions!

      We’re not counting on the rumor. It’s just icing on the cake. The Herndon Metro Station is almost finished. It was scheduled to be completed by 2020 and now delayed until early 2021. Amazon has 2 huge buildings on each side of that metro station alongside with other tech companies, so I think it will increase the value of the properties in the area. The demand for rentals from Amazonians will be high as well.

      A recession is indeed something I’m personally worried about. If both of us lose our jobs, we will be in big trouble. That’s one reason why I wanted to publish this post today to get feedback from you guys. Your concern is a legitimate one. If we can find a great property that meets all of our criteria but was built in the 1970s and 1980s but has recently been renovated, we will consider it too.

  • Ah, the investment property. Many young couples try to do such things but end up burying themselves in even more debt.

    My suggestion — If you want to invest in real estate but can’t afford to buy the property you want, then start with REITs (public or private). You’ll learn a lot from being invested in one and seeing how a “real” real estate company is managed and probably get a pretty good return on your investment.

    I doubt my sensible suggestion stands a chance against those shiny new properties though. Good luck. 😉

    • LOL thank you for your honest opinion, Mr. Tako! Maybe we’re suffering from the shiny object syndrome. Those new houses indeed look so shiny inside and out 😀

      I’ve read about REITs, but I’m 99% sure Mr. FAF won’t be on board. He’s kinda old-schooled and wants to have a property in hand. I will present the idea to him though to see what he thinks.

      I also think maybe we’re just digging ourselves into a HUGE debt. Mr. FAF insists it’s a good investment, but sometimes I’m just not so sure. I hate being in debt. And he said “No pain, no gain” *sigh*

  • I think you made the right choice in waiting for the right opportunity. Real estate is a huge financial investment and not something that should be taken lightly. I’ve read some of your previous posts about being nervous about job security–adding on a second mortgage will only compound the stress.

    • Right on! Both of us are worried about losing our jobs. A huge mortgage will add so much stress to our lives, so we have to consider that carefully. 🙂

  • I would seriously not buy it, especially since you already have a house that is four bedrooms 3 1/2 bathrooms.

    If you have the money, that’s one thing. But since you don’t have the money and you have a baby on the way, I think you guys are playing with fire, in a bad way.

    The stress of taking care of the baby is high enough. Adding on more mortgage debt could really kill a marriage.

    • Great point, Sam! The baby is already stressing us out big time. Add in a huge mortgage and a job loss, and we will be doomed. I think our current plan right now is just to try to pay off the mortgage on our primary residence and save up. Ultimately, without money, no purchase will happen 😉

  • I see a lot of absolute value dollar considerations here but no mention of cap rates at all. You can’t just compare absolute dollars, you need to compare apples to apples for returns. From an investing perspective, it makes sense to payoff the mortgage at the slowest rate possible if you have 3-4% mortgages because the market will outperform in the long run. Not sure if the SALT changes reduced your mtg interest deductible, but if not, that’s also another reason to just pay the minimum payment.

    If you’re aiming for appreciation, does the return outpace the market?

    Those houses look awesome though! $600k would be an amazing price but unfort NYC is the land of absurdity! DC looks much better.

    That sichuan food looks super delicious btw!

    • Hi Olivia, you’re absolutely right. We haven’t run the numbers on a potentially new house because I know it won’t make sense on paper. It is really difficult, if not impossible, to achieve the 1% rule or even close to that in the hot market in DC unless you go to Baltimore or other inexpensive/far away/high crime areas which we’re not that interested in. What can make up for that shortcoming is appreciation due to the high demand.

      We’re banking mainly on appreciation (which is advised against by REI experts) and the fact that we want the new home to be our primary residence while being able to rent out part of it. I’ve seen some houses near the Metro almost doubled in value after only 5-6 years. I wrote a post about why we want to pay off the mortgage early. We’re not so interested in chasing after the market. We’re pretty conservative and want the guaranteed 4% return at least until next year. After that, we can think about stocks.

      The pics of the house I posted are actually for one that was listed for $900k hehe. We just wanted to check it out to see how the rich live. That house even had an elevator!

  • Really good overview! I’m in this area too. My concern, as mentioned above, is that there is going to be a recession.

    Do you really need 20%? I thought you can put less down and still not need to pay pmi.

    • You can do FHA with 3%, the 80-10-10 with no money down or 5% with a conventional loan (at least that’s what I read/heard). But those come with a big fee/interest rate/private mortgage insurance. We want to avoid all that. Out of the 3, I think the 5% for a conventional loan sounds the most feasible to us. But if we could save up 20%, we’d def love that the most! 😀

  • You actually have good dreams. Don’t be surprised that you may be able to raise the said $150,000 even though it seems practically impossible now. When there is a will there will be a way. Just be positive about it. Before you know what is happening, things will fall in line. If I may ask, did you imagine that you can be putting this much to your current mortgage? The same way you have made it happen, you can make your desired second home happen. God help you. Wishing you safe delivery!

    • Thank you for your positive comment. We never thought we’d be able to pay down the mortgage this fast. But things are possibly got gonna get much better from here given the prediction that the market is gonna go into a recession soon. We try to stay cautiously positive though 😉

  • Wow, I kind of feel the same way myself. I knew when I bought my current home that it was not my forever home. However now, housing prices are rising, my new neighbors have very loud dogs and I really want to get into my forever home. However, I’ve looked houses that I like would cost around $400,000. That’s way too much for me right now. So I am impatiently waiting. Just like you, I figure at the right time (and hopefully with several raises under my belt) I will buy my forever home. Until then, I am just paying down the mortgage that I currently have.

  • I was gonna move to northern Virginia 5 years ago and houses I looked at were around $450k. I thought it was expensive then.

    I now live in Southern California and just started looking to buy my first house. Oh boy, I wish I had purchased one a couple of years ago. They have gone up so much. A decent townhouse is $700k and the house that I want to live in is 1.5mil.

    Buying that first starter expensive home is scary.

    I love your blog and your stories!

    • Thank you for your sweet comment, Kelly! CA is sooo expensive. People keep saying there will be a recession soon, and that housing prices will go down. The best thing right now is to save, save, and save for that down payment 😉

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