an "aha" moment

Sometimes a moment of clarity can sure change things. I was working on our "future budget" over the weekend, when it suddenly seemed all clear to me.

I've been wanting to wait and sell this house and move when we had enough to put a 20% down payment on a new place. I've felt very adamant about it. To get what we really want, it seems we'd have to wait it out.....either for the market to come up some more and/or increasing our equity through our monthly payments. It was looking like it could even possibly be that's we'd have to wait a year. Another year dealing with daily/nightly drug deals and drug traffic.

But, why should we wait it out here, in this drug/crime-infested neighborhood? Why can't we put down, say 15% (or 17% or however close we are) and wait for us to reach 20% equity there?! Either way, we'll have to wait for the 20% equity, in order to not have P&I insurance.  But, honestly, I'd rather have that temporary extra payment for a year or however long and have a nice, safe, quiet place to live!

I spent part of yesterday working on a "future" budget. It's looking pretty good - and I'm not even taking into factor our semi-annual bonus (because that is not 100% guaranteed).

Basically, I used my monthly take home pay for 2015 and did not factor in whatever raise I am getting. That raise will go towards increased taxes, due to not being able to claim DD anymore and a state income tax (which we don't have in the state we currently live in). There will be some offset to that in the form of no sales tax, but I'm not figuring that in. I also increased what I set aside for taxes from my side job by 5%.

It's all looking really good, at least on paper. The reason is, that my future budget has almost $600 less expenses per month than my current budget! Some of it is estimated, but here's what I currently spend monthly, that I won't in the near future:

$100 to DD for college living
$120 DD's health insurance
$55 cell phone (when our contract is up this year our bill will go down by $40, plus DD will go on a plan with her BF and I can drop down to 1gb plan and save another $15)
$43 auto insurance (this is just a guess) for DD
$145 meds (my guess when Crestor goes generic - currently paying $200 a month and I can't find any info online on what a generic version might cost)
$8 Netflix (I will drop and just use Amazon Prime - already in my budget for the year)
$75 gas (no need for driving to work)
$5 DD's auto tabs ($60 annual)
$20 water (we'll have our own well system)
$25 DD dental visits (2 per year)

Total: $596

Without my bonus my monthly net income is $6307(after taxes and 401k deduction) and this would be my monthly budget:

$350 health insurance DH (wishful thinking, but I am praying for a Republican president, who will repeal Obamacare and bring this ridiculous amount down. I used to pay $271 a month for DH, DS, and DD and had better coverage)
$100 auto insurance (I'm thinking this might be high estimate - we will be dropping one car and a driver)
$25 gas (one tank will probably last me a month with just trips to stores, etc)
$150 electric/heat (an estimate, but I asked some friends who live in the area and they avg $140 for a big house)
$200 phone/internet/tv (but I will probably drop landline)
$65 cell
$300 loan pmt to Mom
$40 garbage service (again an estimate - we pay $30 here)
$80 meds
$22 meds - Cat
$800 food/misc
$100 yard/home maint
$100 annual expenses (life ins, car tabs, gifts, vet visits, etc)
$140 DH allowance/spending money
Total $2472

that leaves $3835, which I think, even if have a mortgage as much as we are paying now ($2340) we will be fine. That still leaves us with almost a $1500 "cushion". The good part is that the monthly mortgage we are paying now would get us a really nice house, compared to what we have. We are paying so high because of the home equity loan payment schedule (and the high interest rate on first mortgage). And if I factor in the bonus (which, in all reality is very likely. We haven't yet not made our goals), that adds an extra $438 (after taxes) per month.

Our current issue is we have a decent income, to be able to afford a monthly payment on a 15 year loan, we are basically cash poor and not quite enough cash and equity in our home for the 20% down payment I wanted to have. It won't be forever. Say we put down 15%. As soon as we are at 80%, whether through paying down the loan or an increase in home value (most likely a combination of both), we can have the P&I insurance dropped. If I have to go an FHA loan, P&I is required no matter what, but as soon as we got to 80% I'd try to refinance with a conventional loan.

If we put our place for sale in a few months and sell it for what the realtor priced us at last October, we'll have about $65k for a down payment and a few thousand for moving expenses. 

So, at this point I just need to get us pre-approved and then I'll know how much we can get financed. I also don't know how much our almost 6 year old bankruptcy will affect all this. Hopefully, I can get all this figured out in the next few weeks and we can make some decisions then, based on all that info.

It's time to get out of here!!