I was running some numbers and it looks like to me between rising interest rates and general home cost appreciation it doesn't make much of a difference to wait to save for a 20% downpayment (3 years) to buy a home.
Few tidbits:
- We have a 3 month emergency fund
- We've saved up so we can have 5k in the bank for "home repairs" (outside of the emergency fund), enough cash to furnish the house, and enough to cover a rough estimate of closing costs
- We put ~8-9% into retirement (sadly though, I don't have an employer match)
- My wife only works 6 days a month, and we have a 16 month old kid. Ideally, she doesn't have to go back to work more than she wants. I don't see her stopping all together.
- We are not putting any more away for the kids schooling. My hope was to get retirement up to 15% first.
- When I do all the math if we buy say a 250k house, we've got about 11k for a down payment or ~5%.
- Completely debt free (cc's paid off every month)
- Currently renting and because of the school system in this city need to be out of here 2020.
- My income should rise pretty consistently for another 5 years. Job security is solid.
My concern is putting down so little (5%) compared to what I had planned all my life (20%). But now matter how I massage the numbers, even with PMI included, the presumed increase in interest rates (which I have at ~4.5% Q4 2017, 5.16% Q4 2018, 5.92% Q4 2019, 6.13% Q1 2020 (this is when I'd probably get up to 20% down payment, for comparison)) offsets the money saved by waiting for the 20%.
How bad of an idea is it to be looking for a house?
Submitted March 13, 2017 at 10:56AM by coreyndstuff http://ift.tt/2mj0GRe
