Hi PF, this is my first post. My husband and I have begun looking at homes with the intention to move before February 2018, when our rental is up. 3-bedroom homes in the areas we like go from $350-$650K, and we're not comfortable spending more than $400K on a home.
My husband and I currently have 40K for a downpayment, another 5K for closing costs, and 20K in an emergency fund that we don't plan on touching. However, if we continue renting and saving for another year, we can add another 60K to our downpayment, putting us above 20% for a downpayment, and removing LPMI. We're looking at a program where the lender rolls PMI into the loan and you pay a slightly higher interest rate – 3.5% on a 15 year, and 4.25% on a 30 year.
Some other relevant facts:
- 30 & 32 years old
- 170K a year income, both make about the same
- No debt of any kind
- Will likely add 1-2 kids to the home in the next 5 years, and both of us plan to continue working
- Likely to move from this area in 5-8 years, depending on opportunities to advance our careers
The frugal part of me is telling me to wait for 20% and avoiding PMI, but I've seen prices in the area skyrocket year after year. Another part of me worries that the 400K house will be a 450K house in year and that we could be priced out of the area. Another part of me worries we're on the cusp of a bubble. Maybe we're splitting hairs, but we just want to make a wise financial decision.
Any advice?
Submitted November 01, 2017 at 08:25AM by boisterousbearnaise http://ift.tt/2z2IJzH
