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Help! I found my dream home at a crazy time

I've been thinking about a new home for about a year, but not too seriously as I've been okay where I am. I live in a "hot market" city, which has seen a pretty large influx of inventory and price drops over these past few months. I started looking for real about a month ago.

This will be my second time to buy a house. I made some compromises the first time around, mostly because I was being conservative with the monthly payment (I shot for something like 25% of my monthly take home pay). My income has increased by a lot (promotion), and I am confident that it will continue to increase. I work in a stable field. So this time around, I budgeted for like 40%. That was a few weeks ago, when my lender quoted me at around 5.125%.

I plan to keep my current home with its dirt cheap mortgage as a rental, I expect to break even on this for now. I plan to cash out about half my reserve in stocks for the down payment + 6 month buffer for the rental. The only debt I have is a student loan that I'm slowly chewing through because the rate is decent. I will need a car pretty soon though. I suck at saving money, so I'm already preparing myself for a major lifestyle change.

I found the perfect house at a bit above this payment limit. Swimming pool, more square footage, quiet street, no updates needed (like impeccable design choices - could not have done it better myself) , closer to town. 100%, I would stay in this house for at least 15 years and love every minute of it. But! I went to get a PQ letter, and only a few weeks later, we're at 6.125%. This is another $400 per month, and I'm getting squeamish. Now we're closer to 50% of my take home pay per month. This is still doable, but getting uncomfy. How does one even budget when the rates are fluctuating like this? What if the rate keeps going up?

I have a lot of levers and I'm not sure which to pull. My realtor is encouraging me to offer at ask or very modestly below (15k). She feels this house is fairly priced according to comps. I don't entirely trust her judgement, but definitely factor it as she's the expert here. The house has been on the market for 12 days, no offers as of a few days ago.

Options:

  • Just do it and put in the offer at 15k under. Who needs vacations when you live in your dream home?!
  • Cash out more stocks and put a larger down payment on it, which doesn't get me back to where it was and would eat into my reserves. (I was shying away from a large down payment because appreciation has been steady here, but now I don't know anything anymore.)
  • Put in a ballsy offer that is 15k under + 3% seller buy down (idk if this is real, that's why I'm here) + maybe big chunk of earnest money to show how serious I am, but potentially piss off the seller
  • Keep looking, or stop looking. My current house is fine. The market is crazy.
  • Something that the beautiful geniuses of r/RealEstate advise

I know this is a super long post. If you made it this far, thanks! I am such a novice and I only trust internet strangers to give it to me straight.

submitted by /u/IrrelevantMeatsack
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source https://www.reddit.com/r/RealEstate/comments/xkvfkd/help_i_found_my_dream_home_at_a_crazy_time/
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