4 ms·

tbh i can't figure out if this is relevant to my situation or not, because i dont have 500k in cash, or even 50k in cash. FHA loans start at 2.5% down, and $24

tbh i can't figure out if this is relevant to my situation or not, because i dont have 500k in cash, or even 50k in cash. FHA loans start at 2.5% down, and $2400/mo puts the total loan amount somewhere around $350k. So bare minimum would be 2.5% down and 2.5% closing for $18k to get in the door. I'm shooting for more like $30k-$35k, but $18k is the minimum. 18k minus 7k leaves 11k that could have instead been invested. To me the value of keeping a portion of my rent as capital(even tied up and with risks of loss) combined with certainty about what my monthly cost will be 10 or 20 years down the line is worth a lot more than that $11k in the bank today.

chaostheory 13y ago
> FHA loans start at 2.5% down, and $2400/mo puts the total loan amount somewhere around $350k. 1. It's very hard to get approved on less than %10 down post 2008, unless you're taking out a jumbo loan which is above $450k, and this is assuming you can meet all the new strict standards with income (based on what's reported to the IRS AFTER deductions) and credit history. How do I know this stuff? I bought my house after 2008, and so did a lot of my friends. On the off chance it gets approved, you'll be paying something called PMI which adds about %15 to your monthly payment. So $2400 turns into about $2760. 2. As I've already mentioned, if your mortgage is $2400 I can almost guarantee that there's an apartment in the same area where the rent is approximately $1200. 3. Using your example, putting a $3600 deposit for a rental is very different from $35,000 down which doesn't include any closing costs or house insurance. If you're in the Bay Area you also have to account for monthly HOA which is about $300-$500 and it can increase at anytime. So your $2400 / mo now turns into approx $3200 / month with PMI. With housing insurance, that baloons to about $3350 4. The type of home $350k buys in the Bay Area is most likely not going to appreciate beyond inflation, unless you buy something that isn't gentrified yet which incurs other types of risk.
- lacksconfidence 13y ago
  I dunno, heres a home listed for $299k little more than a mile from where i currently am: http://www.zillow.com/homedetails/1515-14th-Ave-APT-201-Oakland-CA-94606/68025984_zpid/ http://www.zillow.com/homedetails/1515-14th-Ave-APT-201-Oakl... I'm not saying its easy, but I think its possible. I'm perhaps being overly optimistic on down payments, the only person i know that bought a house recently did it in TX with 10%
  - chaostheory 13y ago
    I never said it was impossible. I'm just saying that renting still makes more sense than buying.

chaostheory 13y ago

> FHA loans start at 2.5% down, and $2400/mo puts the total loan amount somewhere around $350k. 1. It's very hard to get approved on less than %10 down post 2008, unless you're taking out a jumbo loan which is above $450k, and this is assuming you can meet all the new strict standards with income (based on what's reported to the IRS AFTER deductions) and credit history. How do I know this stuff? I bought my house after 2008, and so did a lot of my friends. On the off chance it gets approved, you'll be paying something called PMI which adds about %15 to your monthly payment. So $2400 turns into about $2760. 2. As I've already mentioned, if your mortgage is $2400 I can almost guarantee that there's an apartment in the same area where the rent is approximately $1200. 3. Using your example, putting a $3600 deposit for a rental is very different from $35,000 down which doesn't include any closing costs or house insurance. If you're in the Bay Area you also have to account for monthly HOA which is about $300-$500 and it can increase at anytime. So your $2400 / mo now turns into approx $3200 / month with PMI. With housing insurance, that baloons to about $3350 4. The type of home $350k buys in the Bay Area is most likely not going to appreciate beyond inflation, unless you buy something that isn't gentrified yet which incurs other types of risk.

lacksconfidence 13y ago
I dunno, heres a home listed for $299k little more than a mile from where i currently am: http://www.zillow.com/homedetails/1515-14th-Ave-APT-201-Oakland-CA-94606/68025984_zpid/ http://www.zillow.com/homedetails/1515-14th-Ave-APT-201-Oakl... I'm not saying its easy, but I think its possible. I'm perhaps being overly optimistic on down payments, the only person i know that bought a house recently did it in TX with 10%
- chaostheory 13y ago
  I never said it was impossible. I'm just saying that renting still makes more sense than buying.