A house recently came on the market that is exactly what my dream house would be for the future. Huge lot in the city, house looks lovely, attached garage, etc. Only downside is as I wasn't prepared to buy now, I would have to take out my IRA contributions (9k) to have enough for 5% down, closing costs, etc. I have an additional 10k saved for this, bringing the total to 19k.
Age: 25
Income: 71k; 48k take home
401k: 28k; 31k by end of year. Contributing to employer's match. I roll yearly bonus into 401k too (8-10% of salary)
Roth IRA: 9k. Currently would max by end of year. Would use all 9k for house purchase. Would be back on track to max 2019 forward.
HSA: 4k; 6k by end of year. Maxing.
Emergency fund: 15k (7-8 months of expenses now and if purchased house)
House: 150k (using 155k for calculations as best offer scenario)
Down payment: 7750 (5%)
Mortgage rate: 4.8% (high end estimate - credit score of 740-760, so I think may come in lower)
Taxes: 3000 (high estimate)
Insurance: 1100
Overall payment: about 1200 (2019 forward would pay 1400-1500/month to try to hit 20% equity to remove pmi). I would consider finding a roommate, but would not rely on that income. Renting a room out here would equal 700-900/month.
My monthly budget if I purchase house:
Mortgage: 1200
Utilities (incl water/sewage/trash): 185
Food: 275
Cell: 60
Internet/Netflix: 62
Gas: 100
Car (yearly insurance/maintenance): 200
Dog: 50
Medical: 60
Travel: 50
Gifts: 35
MBA: 1000-1050 (drops to 450/mth in 2019)
Misc: 173-223
House Emergency Fund: 500 (4% of purchase price)
Am I crazy??
TL;DR: Considering buying my dream house with 5% down by liquidating my IRA contributions (9k). I would be back to maxing my IRA in 2019. Currently maxing HSA and hitting company match for 401k. Year retirement savings rate without IRA would be 33-34%. Is this a bad decision?
Submitted August 17, 2018 at 09:03AM by goraffe https://ift.tt/2BgjYCo
