If anyone out there is willing, I'd like some input on a dilemma I'm slowly starting to realize.
So, the issue here is the greater LA housing market which has been appreciating like mad over the past 10 years. My long term goal is to buy a house, pay it off, and keep it in the family as an asset so my kids always have a place to live and don't have to struggle like so many young people around here do. Of course, they're both still in diapers, so who knows what the future will bring.
Currently, I'm renting a 2br duplex for about 2500/mo. Originally, my plan was to live frugally and save up over the next 4 years to afford a 20% down payment on a 800-900k house. But the LA housing market has been rocketing up so much over the past few years, I feel like by waiting 4 more years to save up cash, I'll need even MORE money, and have to wait even longer, until my savings catches up.
I'm ex-military, so I have access to a VA loan up to 680k for my county. Plus, I can get a TSP (gov't 401k) loan of up to 50k. And then I cash out my non-retirement stock investments and put up to 100k after taxes. Which means I can buy ASAP but I'm leveraged to the hilt. Luckily, I do get quite a few protections from a VA loan compared to a conventional or FHA in case the economy goes to shit.
Or, door number 3, I buy a smaller place right now roughly equivalent to what I rent, which I can afford without having to borrow money and cash out investments. This way, I've bought into the market and I can ride the home appreciation wave until I've saved up enough cash to buy the bigger place that I want to live in. It would be about 4K/mo as opposed to 2.5k/mo. But after tax breaks it ends up being only 1k/more to be a homeowner, before taking into account normal homeowner expenses.
So, which door would you choose? For the record, I currently make about 12-13k/mo.
Submitted May 04, 2018 at 05:46PM by Rekinom https://ift.tt/2rnhYRB
