username.exe

Interesting, how many years' service do they have?

My missus is considering retraining to get her teaching credential, but when she looked into it she was a bit discouraged at the starting salary (versus the cost to get the credential).
SDUSD do offer a loan forgiveness program if you stay in a low-income school for at least five years, though.

pilchardthecat

Hmm not sure. Outside the M25 i could go pretty much anywhere, and i might have to borrow £125k/$200k to move into the Thames valley, but nothing like £250k/$400k that i would need for this unless i moved right into the greater London area. But that would be daft as I'm only 45 minutes from St Pancras on the train right now (i dont work in London but i could without moving)

One thing i didnt factor in was the tax back on mortgage interest and health payments - if we bought a place that would save quite a lot - something like $1500 a month

Pulaski

I was assuming he'd rent for a year.

It would be crazy verging on reckless to buy a house within days of stepping off the plane. In the short term he could either swallow the short term excess cost of renting, or rent an apartment for a year, accepting that it is a smaller home than they would choose in the longer term.

To your point about ease of getting a mortgage, it is certainly easier for someone who has a downpayment of 50% of the purchase price. .... He would just need to resist the temptation to buy an even larger and/or nicer house when the time comes to buy. When we moved from the UK we netted a six figure sum from the sale of our home in London. A year after we arrived I had a conversation with a mortgage sales representative and he went over our finances with me (Mrs P wasn't around to listen, thankfully). When he told me how much I could borrow I resisted the temptation to yell "HOW MUCH!!!" I thanked him for his advice, and I set us a much lower budget, appropriate for our needs and the area where we were looking to buy.

We ended up only buying a house for about 40% of what the bank would have potentially financed - and it was still four times the size of the house we owned in London, only five years old (as opposed to our home in London which was 95 years old), and on 50 times the land! It was several months after we had moved in before I told Mrs P how much the bank had been willing to lend us.

Moses2013

Why bother if you'll end up working more for less? As Pulaski mentioned, it would be daft buying straight away and you have no security if something goes wrong. You seem to have a good life where you are.

MidAtlantic

I think the OP is trying to work out if it will be more for less, and negotiating accordingly.

I agree that buying straight away would be daft, for the reasons Pulaski gives.

There could be reasons to move other than financial. Many people would grab the opportunity for themselves and their children to experience America for a while.

Moses2013

I agree, but often people then don't want to hear the truth and force a move. It's a very expensive place and at the end of the day we all work to make money. Being mortgage free and having a good job in the UK would certainly allow people to have regular holidays, so you'd be able to experience America.

pilchardthecat

Yes that's exactly right. We have been thinking of moving out there for a awhile and want to in principle, but as stated we have a pretty comfortable life and a lot of financial security. What i'm trying to avoid is a situation where we get carried away with the "dream" and find ourselves in a situation where we have to cut back on things to pay for basics like rent. Right now our disposable income looks like it would be about 20% of what it is currently

Matt Sabre

Has the OP factored in renting out their UK home? That would be a nice little earner for a year and then they can decide after having built up credit and lived in LA for a year whether it's worth staying.

pilchardthecat

Yes, its not a lot to be honest - it would need a few quid spent on it to make it rentable, so after fees and maintenance it would probably only be a few hundred a month in the first year. Subsequent years would be more profitable

Wintersong

It seems to be quite common over here that people are "house rich, cash poor". When we bought a house, like Pulaski, we were offered much more from the mortgage lender than we were comfortable repaying. Decided in the end to get a smaller place to keep the repayments down (still 4 bedrooms, 1900 sq ft so it's plenty for a family of 4, but cost half of what we theoretically could have bought if we'd taken the maximum loan!)
We pay $1200/month on our mortgage and are able to make extra, principal only payments from time to time which will ultimately mean that it's paid off that much faster. We also have far more disposable income, which makes for a much better lifestyle for everyone imo.

Matt Sabre

Well I've said it to others here, but I favour pulling as much money out of your house as possible and using it to buy rentals. The mortgage rate here is so low and the tax breaks on interest mean that you can make much more money using the excess on a rental and taking in income. Borrow an extra fifty grand for a downpayment on a decent little rental and mortgage the rest, you'll pay a higher rate than on your primary residence but nothing too painful, you can claim the interest on your taxes as well as any repairs/upgrades and you have your tenant paying your mortgage for you with some cash surplus left over.

celticgrid

You seem to value the stability and financial security aspects of your current situation, so apart from the salary you will be getting I would advise focus on employment terms. Job security should probably be a factor in your decision process as the income from the job is a key factor in your level of financial security.

pilchardthecat

Lots of useful stuff thank you.

Got to disagree with the low rates point in the US though, my UK mortgage is a BOE tracker at 0.9% over base, so it would make more sense to draw down my offset savings in the UK, flip them to $$$ and borrow as little as possible out there, looks like the best rates are 3 or 4 percent which is a lot higher than the 1.4% i can get here.

But yes i do value the security i have, ive worked hard to get it and its definitely the big obstacle in the way of a potential move

Matt Sabre

Ah yes, that's really not on my radar since I don't own any UK property so good point.

Pulaski

But the US rate is fixed for the life of the mortgage - typically 30 years. Are you seriously prepared to bet that interest rates will stay at 1.4% for the next 30 years?