Klubbie
Recycles dryer sheets
I'm currently debating whether or not to buy a house in the current housing market. A little about my situation:
From what I can calculate on some mortgage calculators a mortgage payments with taxes and PMI would likely be around 200-300 more than I am paying now for rent. However, the houses I am looking at are short sales. One would need a little work (paint and carpeting in the house), the other would not unless the inspection turned something up.
I am trying to determine if buying a house that is sold as a short sale is a wise investment. My biggest problem with a short sale is the fact that I would be limited to a minimal down payment with an FHA loan. That bothers me, but when I look at the situation - getting instant equity by purchasing a short sale, it may be worth it.
From a financial standpoint, I've run some numbers and would probably be paying 200-300 a month more than I am paying for rent right now if I were to buy a house. My credit score is very good, so I think I would be able to secure a good interest rate. I have no debt outside of student loans ($700 a month however). And by purchasing a short sale I believe I would have instant equity in the house.
Based on my take home pay, the numbers I've run indicate I should be able to comfortably afford the monthly expenses of a mortgage, taxes, and PMI (as well as my other monthly expenses) without changing my 401K contribution at all. I won't be able to contribute to my Roth the same way I would have before, but should still be able to contribute some.
I feel torn because a big part of me would rather rent a few more years and pay less in rent, and use the difference to save and make a bigger down payment. But I also don't expect interest rates and housing prices to stay as low as they are a few years down the road when I'd have more put aside for a down payment.
So I am interested to hear some perspectives on this. I would be a first time homebuyer, so any and all input is welcome.
From what I can calculate on some mortgage calculators a mortgage payments with taxes and PMI would likely be around 200-300 more than I am paying now for rent. However, the houses I am looking at are short sales. One would need a little work (paint and carpeting in the house), the other would not unless the inspection turned something up.
I am trying to determine if buying a house that is sold as a short sale is a wise investment. My biggest problem with a short sale is the fact that I would be limited to a minimal down payment with an FHA loan. That bothers me, but when I look at the situation - getting instant equity by purchasing a short sale, it may be worth it.
From a financial standpoint, I've run some numbers and would probably be paying 200-300 a month more than I am paying for rent right now if I were to buy a house. My credit score is very good, so I think I would be able to secure a good interest rate. I have no debt outside of student loans ($700 a month however). And by purchasing a short sale I believe I would have instant equity in the house.
Based on my take home pay, the numbers I've run indicate I should be able to comfortably afford the monthly expenses of a mortgage, taxes, and PMI (as well as my other monthly expenses) without changing my 401K contribution at all. I won't be able to contribute to my Roth the same way I would have before, but should still be able to contribute some.
I feel torn because a big part of me would rather rent a few more years and pay less in rent, and use the difference to save and make a bigger down payment. But I also don't expect interest rates and housing prices to stay as low as they are a few years down the road when I'd have more put aside for a down payment.
So I am interested to hear some perspectives on this. I would be a first time homebuyer, so any and all input is welcome.