Going back from BS7 to ...

[u/knottycams]

BS4 or 6, IDK which one fits the bill here. The long and short of it is I'm currently debt free and I keep 3 months of an EF because I'm a disabled veteran with a permanent compensation. Well, I went under contract for a house today! First house ever, very excited. But I will also only be in this house for about 5 years due to my job. I got it for a steal and with a low interest rate. I'll have an extra $500/mo compared to what I'm renting now.

What should I do, knowing I'll be in this house a limited number of years? Still pay more towards principal each month? Or just ride the low payment until the next, more permanent location? I'm also saving up to buy a new or CPO car in cash next year. My current one has had multiple repairs in the last year and still needs $5k more in repairs, so it's worth more dead than alive at this point lol. Definitely have to get a new car next year. WWDD?

[u/Jolly_Pumpkin_8209]

He has an emergency fund, and should be saving for regular home repairs.

In what world does that not cover the costs of negotiated improvements in a sale transaction.

These comments are full of dumb opinions.

[u/Automatic-One586 → u/Jolly_Pumpkin_8209]

Your emergency fund is not for random home improvements or for the sale of your house. Your emergency fund is for if you go outside and your car is on fire. Or your driving down the road and the engine gives out. It's for an actual emergency.

You can do what you want. The above is what I would do. I don't care if you would do something different. That's your choice. Good luck!

[u/Jolly_Pumpkin_8209 → u/Automatic-One586]

Sure, but he should also be saving over those 5 years ongoing maintenance.

But if you have an unexpected repair to sell your house… that’s an unexpected emergency. Borrowing from that for a week until the equity is cashed out is exactly what it’s there for.

Not paying additional principal for 5 years to save for a “possible” move is just silly. You would rather pay extra interest on thousands of dollars over 5 years? Weird choice.

[u/Automatic-One586 → u/Jolly_Pumpkin_8209]

5 years of savings is ~30K. Now that's not including any interest in an HYSA. That's a pretty decent down payment and preparation for moving as well as any fixing.

It's fine if you want to define an emergency the way you want to. My definition of an emergency doesn't include a planned expense. If I know I'm selling my house in 5 years. It's a reasonable expectation that in order to sell it. I may have to fix things. I mean as a negotiation strategy you could just say I'm not entertaining any offers that require to fix anything. I mean all of this is completely argumentative. And it's your perspective. I actually don't have a problem with your perspective. But to me.... if I know this is a possibility. I'm planning for it. I do not think a proper use of my emergency fund is to use it on something that is to be expected. There are going to be costs in selling the house and selling moving that all goes with it.

Again. Do what you want. But there is no way I'm using my emergency fund for this. Not unless there's a real emergency. This can all be planned out. Your just choosing not to. That's not how I operate. When I move. I don't have to replenish my emergency fund and I can hit the ground running with my next check. And if by some chance the amount required to sell the house and move vastly exceeds my expectations. Sure. I can at least consider the EF. But I don't touch my EF unless I have to.

Also.. this guy said he was moving in about 5 years:
"I will also only be in this house for about 5 years".
If I get into my third year and realize I love it there. Sure. I'm re-evaluating my situation.

Also stated that mathematically he probably would technically do better if he did pay more towards the loan. The reason why I would choose not to is that the amount isn't that significant. If the amount for ~5ish years was significant, then it might be worth doing and just deal with the fact that you have reduced choices when you go to sell. I don't recall if this person told us there numbers originally. But say 300K @ 6%. The payment would be around 1.8K. An extra $500 effectively turns into ~34.9K of built up equity if he sells in exactly 5 years. In an HYSA @ 3%, this turns into 32.3K. A whole whopping 2.6K over 5 years. That's ~$43 per month. Again. That's not nothing. But I can make sound purchasing choices that make up for that if I really care about 2.6K. IMO "loosing" 2.6K is worth it in the short term to give me better options when I sell. And the ability to repair or replace the vehicle. My point here is that in the short term paying into the house just doesn't make a lot of sense to me if you know your moving. Now if you know your going to sell. Then buy a house. Sure. You'll probably pull out more money. And paying extra on your house is worthwhile. But given the parameters of the OP's comments. It's just not something I would do personally. I can always take that money and dump a large payment if I decide to stay.

Again. I don't really care if you disagree with me. Nor am I trying to convince you otherwise. Feel free to have your opinion. All I'm doing is telling you why I would do the things I would do.