Long time lurker here, first post. First, I want to thank this community. My wife and I (35 & 38) have used what you’ve taught us to get out of debt and save up an emergency fund! We’re maxing out our 401Ks. We live in Seattle.
We would really like to own a home. Do we try to buy in Seattle? Do we move and buy somewhere else?
We have $3600 left over every month after all our other expenses. $65K in savings.
More info: No children. Unsure if we want ‘em. I work from home. My wife has to go into the office. My mother is about to retire and has only SS income. We’ll have to take care of her pretty soon, so our home needs to be big enough for the three of us. We used to live in NYC and are so burnt out on commuting that we refuse to do it ever again. If we buy in Seattle, we’d try to do it within walking/biking distance of downtown. We’re looking at ~$700K. We can get a $667K 30 year fixed conforming loan at 4.5% with a 5% down payment & $133/mo PMI. After mortgage + tax + insurance + PMI + maintenance, that’s ~$4065/mo, leaving us with ~$1750/mo left over after everything else (we pay $2190/mo rent). We could pay off the house in 15 years, after paying $250K in interest.
We could also move to a better housing market where a similar home is closer to $250K, but that would mean my wife would have to leave her job. She makes $80K/yr. I can still work at home and continue making $120K/yr. I’m in tech, so moving away from Seattle to another market is risky: if I lose my job, that means a large pay cut. I’m also building a DevOps skillset that could land me a more lucrative job here. My wife works in a tech-related field as well, and has seen her salary grow from $65K to $80K in just 2 years. The job market here is amazing, but the home prices are bananas.
Is it insane for us to spend $700K on a home? We need a sanity check. The Seattle market has completely made us lose touch with what is normal. The home prices are going up so fast that saving up 20% is literally a wash: the $ that we would save on interest & PMI would be entirely canceled out by the growth in price of the home over the time that we save. It’s now or never: by the time we have 20%, the home we could afford would be too small for all of us + possible children.
On another note, isn’t is quite mad that a couple making $200/yr can barely afford to buy in Seattle? I’m just happy that it’s even an option of us, though. We’re extremely fortunate. So, /r/personalfinance, what do you think? Buy a less expensive house in a weaker economy, or stay here in Seattle and ride the gravy train?
Submitted April 27, 2018 at 11:10AM by PFredditlurker https://ift.tt/2HxkheU
