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Long post incoming. Wife and I have had a lot of discussions about house buying. I have managed to hold off on house buying during our training, as the numbers seemed to not make it worth it, but she is getting antsy at this point. Her general take continues to be 'we're throwing away money renting' despite multiple explanations of additional costs that come with home ownership and that short-term buying doesn't make much sense. Of course, the majority of our friends did buy houses while still in training, and she asks if they all made the wrong decision, to which I say, if they're likely going to sell in 3 years then most likely yes unless the market timing magically happens to favor them when they buy and sell. Anyways, her salary is going to go significantly up in July, and mine will likely do so as well next July. So probable combined gross income will be somewhere between $250k-350k/yr. Current non-requirement funds are - $21,000 high yield savings (1%) - $22,000 3 year CD (1.3% rate, ugh) which matures this year - $14,000 her parents-controlled brokerage acct, which we plan to take control of soon The CD and brokerage funds I consider part of house downpayment, with the savings account as the e-fund, though I'd prefer if that were double, as currently it'll cover just under 3 months of expenses. On top of this, we have a combined student debt of about $350,000 at 6.8%. Probably will be going for PSLF, so plan is to make minimum payments unless I take a job which disqualifies me for it, in which case it should be possible to pay them down in 3-5 years. After usual monthly expenses, minimum loan payments, and saving 15% toward retirement, I estimate that we can set aside probably $3-3.5k/mo toward a down payment. So we could probably afford a $350k house with 20% + closing costs + furnishing in 2 years. Whether this buys us a reasonable house or not is very dependent on where we end up. If we go somewhere far less expensive than where we are now, this may be fine for a house that we decide to stay in for the long haul. If we stay in our current market (Boston area), then we're pretty screwed. The latter option is a significant possibility (her dept just gave her a big position starting in July, and they've already started talking to my dept about keeping me on, but giving what they're looking for right now, the answer is probably no), but hard to know until the job search starts in earnest. Her thought is that, if we stay here, we should get a 'starter condo' to build equity, again thinking that we're throwing away money with renting, and then sell it 5 yrs from now (so probably only 3-4 years actually living there) before our 3 month old son starts school and move up to a reasonably-sized house. My thought is that, with that time horizon and what we can actually afford at $350k in our current market, I doubt we'd make enough on appreciation to make it worthwhile. My personal preference is to wait until we can save up enough for the 20% down + closing costs + furnishing/etc for a house we would plan to stay in rather than go through the whole 'starter house' thing, which would probably move the saving time closer to 4-5 years, but is there are argument to be made for getting a smaller house first?
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Mar 28, 2016 16:20
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| # ¿ May 14, 2024 01:38 |
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Just had our offer accepted $5k under list. Ended up finding a place a few months before we had originally anticipated so things aren't quite together. Choosing a home inspection service off Angie's List isn't a bad thing, right? Have to choose a lender, definitely comparing costs closely. Other than that and getting homeowners insurance, anything else I should be doing in the short term?
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Feb 13, 2018 23:07
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How good are the online search tools? For example, if I put in parameters into Zillow's mortgage search tools, I get a variety of rates. Are there other places I should be checking, like with my bank (Ally), or somewhere else? Original pre-approval was from SoFi, got a better quote from searching through Zillow. Incidentally, best rate on 15% down was 4.5%, looked like rates on 30 yr term are 4.2 at best now.
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Feb 14, 2018 02:10
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Ugh, this process sucks. Initial inspection was fine and thought everything was in order, but at the recommendation of our agent we checked moisture in the exterior because there's stucco Dryvit. Turns out the exterior has allowed moisture into the wood and we have to get that evaluated now and an estimate to repair, but it's huge if it's superficial vs interior rot. Getting an estimate, but had to argue hard with the seller to get an extension to do so, and it's not clear they'll agree to repair and/or give a credit/reduction in price to offset it all. It'd just be awful if hey surprise, it's actually a $40k job and not a $5k job and they refuse to do a full repair. Glad we got the inspection, but drat this process is stressful.
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Mar 2, 2018 02:45
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Ugh, this process sucks so much. See prior post about discovering the wonderful problems with early EIFS installs, but when we got a contractor to get an estimate on repairs, he discovered that the frames of all the windows, not just the ones on the EIFS siding, are rotted too and likely need to be replaced. And his estimate for repair, not including the rear and side windows, is already like $60k. If it was just the siding alone maybe we could have come up with something, but doubt the seller's going to give us that big a concession on price + closing costs, and we definitely can't eat that cost. It just sucks because we've been watching the market for like a year and houses in this range that are desirable get snapped up in like a day or 2, or through word of mouth beforehand, or some other ridiculousness. Higher and they sit on the market forever, but that's out of our price range. Lower and they're also there forever because they're crap. Ugh.
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Mar 5, 2018 22:57
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How concerned does one have to be about drywall if a house was built between 2001-2009, when I'm told some bad Chinese drywall was used in some builds. Is there some kind of specific evaluation you can ask an inspector to do to evaluate for this?
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Mar 20, 2018 18:01
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See if you still feel the same about them when you start getting calls/texts multiple times a day trying to get you to come back to them.
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May 25, 2018 11:48
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So when the VA managed to share all the SSNs and identifying information of all of it's employees, we all got free sign ups for identify monitoring services. Kind of useful I guess, except for the fact that when I was living in the city, all of the notifications I got once every 3-4 weeks were for sex offenders moving in within a mile or two of where I lived. From what I could tell it's basically impossible to find anywhere in a city that isn't populated by registered sex offenders within a few hundred feet.
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Dec 19, 2018 01:53
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Holy poo poo this thread. You spend all this time bashing people in the BWM thread because they aren't fully min/maxing their income/spending, and now you're confused as to why someone might care about a difference of $15k (paid up front, this has to be brought to closing) on a home purchase? How you buy one thing is how you buy everything, and at least giving consideration to a $15k difference is reasonable. You're telling me that you don't spend time shopping around for the best price for much smaller purchases like TVs, auto insurance, etc to save a few bucks? So what is the appropriate price/percentage of cost to income ratio where you can be completely price-insensitive? Yes, I tend to agree that there is a price to be paid for convenience/how much you like the home/etc, and that given the larger numbers involved in terms of home price and income, $15k is an amount that doesn't have to be a deal breaker, but the answer is not to just blow it off.
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Jan 4, 2019 15:31
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What do people do with saving for assumed house repairs/maintenance? I’ve been putting into savings the equivalent of 2% of the purchase price annually, but it means I end up with a large amount of cash in savings and it seems kind of silly to have what amounts to a much larger e-fund than I’d otherwise need. I suppose it depends on one’s risk tolerance, just curious to hear how other people approach it.
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Mar 17, 2019 11:04
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| # ¿ May 14, 2024 01:38 |
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Would also factor in needing to set aside 1-2% per year of the house value in expected repairs/upkeep in addition to PITI. You may not have any significant costs for a while (and if they happen up front that's why you need a good E-fund), but eventually expensive things happen like the roof needing to be replaced to the tune of $25k and so it's something to budget in the beginning so you're not caught off guard when the large bills come due. How much to budget for this also depends on how handy you are vs having to farm out repairs.
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Jun 29, 2019 20:55
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