Hello, PF - I'm looking for some outside experience and recommendations with the process of my first home purchase. I don't have any real-estate experienced friends/family that can offer advice and I don't want or expect sugar-coated responses from anybody, so please give me your honest assessment if you're willing.
I am 32/M, single, no kids, live in the Portland, OR area and I recently signed what I hope is my last 12-month rental lease ever. My current rent is $1,200/month and expires in June, 2018.
Below is a summary of my finances:
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Annual salary is currently $103k, and I am expecting another decent raise next year in April (~3-5%)
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Currently have $0 debt, credit card is paid in full each month, student loans paid off in 2016, car paid off in 2012
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Monthly expenditure is about $3,000/month which includes Rent plus all other typical bills, food, insurance, fun money, etc.
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I have been saving anywhere from $2,000 to $2,500/month in an Ally savings account for the past ~18 months. This account will go towards my down payment and closing costs. The current balance is $40k
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Current emergency fund is $7,000, held in a separate liquid account, not included in the Ally account
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I'm currently contributing 10% of my income to my employee based Traditional 401(k). My employer matches a generous 5% for matching funds and another 5% for profit sharing for a total of 10% matching, 20% overall when combined. The current balance is ~$80k
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I left a previous job in 2013 and rolled a SIMPLE IRA (~$11k) in to a Schwab Roth IRA account. Taxes were paid for the transfer TY '13. Total contribution since 2013 has only been $9k and the current balance is ~$22k (made a couple of naive equity trades in '14 that really slowed my gains, live and learn...)
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805 FICO credit score, checked last month
I'd like to purchase a modest house around $350k Max (3 bed, 2 bath, ~1,500 sf) and ideally be closing on a home in May or June of 2018. By that time I expect to have another $20k saved for a total of $60k in the Ally account and I'm wondering if I should/could make a 20% down payment with my options.
In order to cover 20% down ($70k) and closing costs I figure I would need roughly $80k in the Ally account, and I could swing this if I clear out my contributions/transfer ($20k total) of my Roth account. I feel like my 401(k) alone is on a good track for my retirement and my Roth could serve me better this way - but is it worth it? This scenario would be close to tapping me out funds wise, but I have pretty stable employment so maybe not a deal breaker if i'm comfortable with a less than ideal emergency fund for ~3 to 6 months post purchase.
Part of me thinks I'd be better off with only 15% down, live with the modest PMI payment, and not touch the Roth...Or....I could do 15% down, pay the PMI, and take the Roth money for a nice $15k - $20k cushion for new furniture, repairs, etc...Or...maybe something else is better like a 85/15/5?
What would you do in my situation? Thank you for any advice!
Submitted July 30, 2017 at 05:28AM by jimz0rz http://ift.tt/2v8mQgx
