I recently received a raise and am looking to purchase my first home. I have a 720 credit score and going up and qualify for a very low interest conventional home loan. However, I think I can swing the 3% down payment but that would leave me broke and with no funds for closing costs. In the market I am in, houses are selling within hours of hitting the market so I don’t see anyone wanting to negotiate anything more than 50% of closing costs.
I have thought of anything I could imagine in order to come up with this extra $9k or so but nothing. I just started my first real job a few years ago after enjoying my 20’s traveling and only have about $15k in my 401k as of right now.
Everything I read online says this is a bad idea but it’s this or rent a house. Rentals are actually going up here due to influx of people from other HCL areas.
As a first time home buyer I also qualify for up to 5% down payment assistance which would be awesome but the fixed interest rate is 4.5% where I could probably get 2.8% on a conventional loan.
Does it make more sense to pull money out of 401k and sacrifice the compounding interest and company match vs or pay a much higher monthly payment for same house and take the “free” money? I think either make more sense than spending $20k a year on rent.
Help?
Specific details: Age: 31 401k balance: $16k Income: $70k but could be as high as $100-115k within the next 3-4 years.
Submitted November 02, 2020 at 04:26PM by SmearedBoogers https://ift.tt/3ei2buJ
