I am in a similar position as the OP.
First time buyer, newly-wed, have 20% to put down and some cushion after that. However, we both work in dynamic fields where we can't tell if in 3, 5 or 10 years down the line we will still be living in the same town.
I didn't realize closing costs are around 10% (at the sellers expense).
So basically your house needs to appreciate 10% for you to break even when you sell 5 years later.
With that income you should not buy a $775k house. Seriously.
First Time Buyer wrote:
I am in a similar position as the OP.
First time buyer, newly-wed, have 20% to put down and some cushion after that. However, we both work in dynamic fields where we can't tell if in 3, 5 or 10 years down the line we will still be living in the same town.
I didn't realize closing costs are around 10% (at the sellers expense).
So basically your house needs to appreciate 10% for you to break even when you sell 5 years later.
They are not all at the seller's expense. What is customary varies region to region across the US and many items are split.
Thanks for all the additional advice. Some good insights. Luckily I'm not in a particular rush to buy, so can get a better feel for direction of the market.medium_pace, I really hope that handle is in reference to Adam Sandlers stand up tape, as opposed to running related. That was a great comedy set.
medium_pace wrote:
[quote
I guess the flip side is paying $2k a month for the next 5 years is $120k out the window.
As opposed to paying $29K in interest x 5 years, so $175K out the window? Also no strings attached if you leave, no repairs. At best you get back about 0.30 on the dollar for interest tax deduction, probably more like 0.20. Also there is no guarantee that lasts forever, it is a completely bogus deductions and will be eliminated by any sensible tax reform. Only about a 20% chance of that happening, but I'm just saying the interest deduction is not a certainty and if that is all that is driving your decision you need to realize this.
The housing market in CA is ridiculous and overvalued, no matter how you try to justify based on what other fools are doing.
Just look at how the economy is doing right now, overall pretty well. Do you think it will be significantly better in 5 years or possibly worse? What about home prices? What if you just save your extra cash and buy in a more favorable market.[/quote]
Buy the house
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