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I've spent weeks doing the math - I'm just not going to buy at all for foreseeable future.

You might read all this and think "duh, you're so naive". Well, yeah, this is the first time I was going to buy a home and it seems like everything I heard growing up is no longer true.

Our household makes 130k/year. The number looks like a lot and I know it's more than many households make, but it doesn't feel like a lot. I can't imagine what other households are doing and that sucks.

My income was much lower before, so it's not like I was making 130k and saving for a super long time. In my area, central FL, even just ok houses in ok areas are like 350k. I always heard that I needed to put 20% down. 20% down on 350k is $70k. No way that was going to happen. But then I heard about FHA loans.

3.5% sounded like a dream. That's like 12k! Totally doable. So we go out and look for houses and we find one for 380k. It's a bit higher than we expected, but it's really nice.

Going over the numbers with the loan officer and reality starts to kick in. I was told I could also get a loan for the 3.5%. That sounded good because I didn't want to purchase a home and then have no cash left. That's like $200/mo. After we do all the math, we have like a $3,500/mo payment.

So I'm thinking "that's a lot. but FHA allows me to put 3.5% down, but get appreciation on a 380k asset. it's almost like a forced savings plan." So the 3.5k/month doesn't feel that bad because I'll be making about 10k a year in just appreciation.

But then I start looking at that number more in depth.

The area I'm looking to buy in appreciates around 3% each year. But my loan rate is 6%. So while I'm making 3% on the 380k, I'm paying 6% on like 370k!

So, I'd be paying an additional 1.5k/mo over my current rent to finally have some equity in like 7 years and I'd be on the hook for any property repairs and maintenance costs during that time! I'm getting all the negatives of home ownership with non of the positives.

That's to say, I think I'm gonna save to be able to put 20% and wait for prices and rates to hopefully drop. And if they never do, I'll just keep renting.

I always heard "buying is better than renting" and "even if you're paying a bit more, you're getting equity." Does anyone feel like that math just isn't mathing like I was always taught it would?

submitted by /u/revolutionPanda
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source https://www.reddit.com/r/RealEstate/comments/1ta5sjz/ive_spent_weeks_doing_the_math_im_just_not_going/
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