Hoping to keep this short but I want to add some details for targeted advice. Currently renting after divorce forced a short sale 2 years ago. I spent the last year paying off almost all my debt, and have $30k saved for a downpayment on a home. My ex wife managed to get an FHA loan through some loopholes and the loan officer is trying to get me through for an FHA loan based on the same loopholes. If not I do still have SOME form of VA eligibility left although its a lot worse due to the short sale (max $285k and must put 5% down, plus funding fee is higher due to having bought 4 previous homes through VA).
I have 2 kids (9 and 7), and am looking at homes below $350k but really want to be around $330k. Here is a breakdown of my financials:
Income: 122k Debt: $250 child support and $250 student loans Current rent: $1750 Current savings per month: $1500
So I'm saving $1500 a month, and I also have side work that pays me UP TO $2000 a month, but I don't want to rely on it because it could slow down or drop altogether. My concerns are with the market trajectory, interest rates, etc. Currently if I put $30k down on a $325k home I'm looking at ~$2600 monthly. Based on my current savings I should be able to make this work although I'd only be able to save like $600 a month ($2600 IF I have side work). I should get a raise in the next 2 years which will likely bump me back up to around $1000 a month in savings if that happens. I don't want to stay where I am because currently my kids share a room and are getting old enough I want them in their own spaces. I also have my own goals and aspirations that I want to start working toward that are limited when renting. I haven't found a home under the $300k mark that I really consider liveable within driving distance to my kids school that I'd want to stay in forever, and I don't want to move again after buying. So here are my options:
Stay where I am one more year and save more. This would allow me to put more down and if I can't go FHA, would allow the 3 year wait to be over and it would be available. Issue here is my kids are still sharing a room, the space is tight, and I wouldn't be able to start working on my other goals that I so desperately want to get to, unless I just did, but then I wouldn't save much more for a house, and rates aren't likely falling, so I may be worse off next year. Housing in KC area is still hot in the northland.
I can continue renting but move to home better suited for us. This would allow me to do some things I want to get done like getting the kids their own rooms set up, having space for my server equipment that I want, etc. Downfall is rent would likely be $2200-$2600 and that would hinder any savings, along with the other points in #1
Just buy a house, accept the $2600 payment, and work hard to get the PMI off, which would take it down to ~$2400. As long as taxes don't go crazy before I get PMI off or get a raise, this should work, although at $2600 I won't be saving much to do the things I want to do, unless my sidework holds steady, which currently it is luckily.
This market just sucks.. Thanks in advance for any advice!
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source https://www.reddit.com/r/RealEstate/comments/1wmfi1m/looking_for_advice_buy_or_rent_for_another_year/
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