I’m not good at finance. I just realized daycare will cost $100k over the next 3 years. Does it make sense to get a $100k loan and spread out the cost over 10 years? We can afford to pay cash, but ...

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Personally I wouldn’t take a loan for daycare. If you can pay cash or find a nanny for cheaper I would go that route. Having a 10 year loan will hurt you applying for a mortgage because your income to debt ratio and credit score will be affected.

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Agree with the above. Childcare (daycare/nanny) should be covered out of monthly cash flow or you risk getting yourself into a major debt issue. Also a personal loan for that type of expense (eg. (Un-collateralized debt) will very likely come with a high interest rate, which would really affect your ability to qualify for a mortgage or generate monthly savings in the future. I’d suggest renting in the district where you hope to enroll in school and wait until you have enough of a down payment and can afford your full run rate (childcare + mortgage) before buying. You could also look into creative financing options for a home if you can’t put 20% down (eg 10% down + PMI or a piggy back mortgage)

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FHA can be for first time home buyers. Not low income areas. 803 is a great credit score but may need to be a bit higher. My lender is US bank

I haven’t heard of this before, but it doesn’t sound like a good idea. Would sending kids to private school be cheaper than the better school district house? Waiting a couple more years to purchase the house? Find a cheaper childcare option?

If you’re paying off daycare for 10 years, it also reduces your ability to save for college or retirement, and just overall sounds like you need to find other ways to trim your budget so you don’t end up relying on debt too much.

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Thanks :) trying to get creative-but that makes sense!

Don’t take out a loan for childcare. It is outrageous to see that number tallied isn’t it?! Mind blowing. But you could probably adjust your monthly budget elsewhere to cover care and your other financial goals- like saving for a down payment. It won’t necessarily be easy or fun, but it is doable. Good luck!

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There's a dependent care FSA that you can enroll in that's pre-tax. It's not anywhere close to $100k, but it might help with some of the cost burden

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Already doing it 😞

We don’t live in a good school district and we’d need more $$ for a down payment and a mortgage to get into a good district in 3 years. That $100k could get us there.

Daycare isbananas! Sometimes I do the math on what I spend per hour and feel like it is not a lot, though!

One thing to ask is if owning your home is as important as providing for your family’s other needs in the near term. Of course a home can be a valuable investment. However many young families who rely on a single income or are in a high COL location will require a lot of time to save up for a home purchase in their ideal neighborhood. It may seem like everyone’s buying, but in reality a lot of people are only able to do so with down payment help from their parents. If I were you I’d first take a hard look at your current discretionary spending and see where you can make cuts to offset some of the childcare costs for the next few years (eg, vacations). And if you can’t buy in your target district by the time your child is nearing pre-K, considering moving (rent our your current home) and renting an affordable place for a few years until you are ready to buy. (Just think of how quickly you can rebuild your savings once the kids are in public school)

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