Halt Investments For Down Payment Or Maintain Investments While Saving For Down Payment?

Hey guys and Gals,

I wanted to get some opinions/advice on my Wife and I’s situation. We plan on going to a CPA soon, but I want to get as much information and ideas as I can before the meeting.

Currently, between my Wife and I, we make approximately $120,000 a year. We’ve spent the last 2-4 yeas paying off all of our debt. We’ve successful paid off both of our student loans, both of our cars, and reduced our credit card debt to $0. So as of right now, the only debt we have is our mortgage, and we’re paying an additional 20% of the monthly mortgage on top of it. As of right now we have about $100,000 in equity. We’ve maxed out our ROTH IRA for this year and begun investing in ETFs. We’re starting to look at our next steps and determine what our best move would be.

At this time, I’m considering going back to school and earning my Law degree, and we are looking at buying/building a new house. Something closer to our “dream home.” We want to save up as much as we can, as quick as we can, without recklessly risking any gains we could earn from our ROTH or ETF investments.

Right now, we have our monthly living expenses at roughly $6,600 a month. This does not include Tithe nor ROTH contributions. Without those contributions we can save roughly $40,000 per year, whereas with the contributions, it’s closer to $20,000. We can of course increase this amount through overtime and my irregular side business.

With the picture set, we’re trying to evaluate potential options in the coming 3-5 years.

1: We can continue on our current path, contributing the additional 20% to our mortgage and 10% of our net income into investment/retirement (not counting 401k pre tax contributions.) This would bring us somewhere around $60,000 in for a down payment in 3 years. Minus the cost of tuition.

2: We can halt our Roth, ETF, and 20% additional mortgage payment, which would bring us to around $90,000 in 3 years (minus tuition). This would reduce the total equity of our current home at the time of the sale, and we would miss out on potential gains in the market. The idea is to reduce the monthly expense with a higher down payment which would allow us to invest more into the market once in the new home.

3: We can continue to contribute to the ROTH, but once it’s maxed out, we take the same 10% and apply it to the down payment. This provides some form of gains in the market with the loss of ETF gains, but provides more for the down payment in the short term.

My Wife and I will be speaking with a CPA to get some more information, but I wanted to ask the masses and see if they’ve either been in a similar situation, or know of one, and can provide some information or insight. What would you do in this situation? As questions come in, I’ll add them to the bottom of the post with the answer.

Thank you all for reading this far, and please be kind.