Since mortgage rates are at/near an all-time low these days I'm trying to decide if this is a good time for me to buy. However, there's also less inventory than there would be in non-pandemic times, so the scarcity seems to be driving up prices a little bit not to mention bidding wars that would ensue. I live in Seattle, which has become a very expensive city over the last 5-10 years, and home values have appreciated like mad so I'm wondering if this is a rare chance for me to get into the market. Do the increase prices cancel out the potential buying power of a lower mortgage rate?
My situation: I'm 35, single with a dog. I currently make $95k and have about $50k in savings, credit score in the 790s. I've also been told I can take out the money I've put into a Roth IRA with no penalty, which would be another $15k (but I've read in other threads that if one has to take money out of retirement to buy a home then they cannot afford a home which certainly makes sense).
I've been preapproved for a loan of $380k with the following options:
- 2.875% APR with estimated closing costs of $6808
- 3.0%, $5390
- 3.125%, $3500
This would give me a monthly payment around $2000-$2200 a month. I don't really want to live in the suburbs so in this price range it's pretty much only 1br condos, maybe a 2br if I get lucky. I'm currently paying $1650 in rent for a 1br apartment, so I'd essentially be paying an extra $500 for a similar living situation. Would the equity and appreciation be worth paying that difference? In theory I could apply it to renting a bigger/fancier apartment instead and still be able to save, but would I miss this buying window?
Submitted June 27, 2020 at 05:56PM by sethab https://ift.tt/2ZiOFj4
