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  • #16
    Yes, the house is way more expensive than it would have been a couple of years back. And yes, there could be a correction at some point. It is scary to make that commitment.

    I would look at this differently. The price could continue to increase, or not. But even if there is a bit of a correction if interest rates get to say, 5% on a mortgage, wouldn’t your monthly expense be just as much?

    If this house will be good for you and your family for a decade or more, I would just go for it. The mortgage will be about 2x your annual income, so it is likely affordable for you.

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    • #17
      OP, if your mindset is that you're paying a 24% premium for the house; you're not ready for home ownership at this time. Like the stock market, if you're not in it, you're not in it and just timing the market -- the stakes are just more concentrated like owning single stocks. -- know your investment.

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      • #18
        Originally posted by StarTrekDoc View Post
        OP, if your mindset is that you're paying a 24% premium for the house; you're not ready for home ownership at this time. Like the stock market, if you're not in it, you're not in it and just timing the market -- the stakes are just more concentrated like owning single stocks. -- know your investment.
        However, “mindset” here is a lack of education. It is not based on knowledge. Free sources are available. Realtor.com has 3 quantitative and Chase has it’s own for THAT specific address.
        Your lender also will get an appraisal. Let alone an inspection as well as personal preferences of repairs or changes. Neighborhood price changes and price/ft as well. OP needs to educate on fair value for this particular house.

        Housing is a cost of living, rented or owned. OP needs to educate on how this fits into an annual budget.

        My take is OP is an uninformed potential buyer that needs guidance on the home buying process and where it fits into his financial plans. This house should be used as the motivation to learn. Much better than “mindset”. That needs to go.

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        • #19
          Originally posted by nastle View Post
          600k house
          approx 140k overpriced per precovid numbers
          its exactly the house you want
          you need a house now as family needs it
          you can get low interest 30 yr mortgage with 5% down
          Your extended family is close by and stable job so no plan to move anytime soon
          excellent schools
          safe area

          biggest con is its a hot market you will be upside down 140 k instantly

          if you wait no guarantees such a house will come up and interest rate likely go up ( maybe prices too ) plus renting and subsequent moving has its own costs
          As others said if you are in a stable situation (stable job), and plan on being there another 10 years with stable income, and your family likes home then the following need consideration:
          1. Will i be in this house for at least 5 years?

          2. Can i afford it? (look at total cost & monthly payment) (i prefer a 15 year fixed with monthly payment < 25% of take home) I think WCI says total cost < 2x yearly income (or something?)
          I hate debt. I don’t like leverage. Some borrow & invest others (many) borrow and “pretend” that they will invest.

          3. other debt (30k, not bad, but why / what and plan?)

          4. Location is safe with good commute to work & family (wife & her momma in my case) like it.

          Stuff like that. Prices will go up over time. prices pre-covid are old news and irrelevant.

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          • #20
            If the answer to those questions is yes, then look at valuation of the house today:

            1. comparable homes nearby that sold recently?

            2. price per square foot compared to neighborhood in last 6 mo?

            3. other valuation methods for now/ today.

            Precovid numbers are old news.

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            • #21
              I think it makes sense in your situation.

              Also, a primary home is not really an investment, but more of a consumption item. If you buy a house and don't ever plan on selling it (and instead giving it to your kids), then the value really makes no difference, does it?

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              • #22
                Originally posted by Larry Ragman View Post
                Or, you could rent…
                Can but cons are
                slightly less payment but boss much less happy

                no idea when or if market goes down so how long should we rent ? As it’s timing it again
                Since this is where we want to be > 20 yrs so I’m seriously considering buying

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                • #23
                  Originally posted by StarTrekDoc View Post
                  OP, if your mindset is that you're paying a 24% premium for the house; you're not ready for home ownership at this time. Like the stock market, if you're not in it, you're not in it and just timing the market -- the stakes are just more concentrated like owning single stocks. -- know your investment.
                  So what will make me ready ?

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                  • #24
                    Originally posted by cards67 View Post
                    It is what it is. If your family needs it, what other option do you have? You can still easily afford it.
                    Rent indefinitely or until a crash 💥

                    Comment


                    • #25
                      Originally posted by StateOfMyHead View Post
                      I appreciate your line of thinking because things are overpriced right now and I feel it is wise to view your residence as an investment. In this example all the boxes are checked. I would do it and just accept that it is possible you are paying a 24% premium to get exactly what you want. You might also be pleasantly surprised and see it increase in value if you stay there for a while.
                      Thanks
                      it’s really hard to compete with cash buyers so no guarantee I’ll get it

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                      • #26
                        Originally posted by nastle View Post

                        20k debt
                        income 300k
                        attending approx 10 yrs
                        You can clearly afford it. Great income. Minimal debt. And it’s primary home. I wouldn’t worry too much about housing bubble. If you need it and it’s primary home, then it doesn’t really matter. And no way to predict market. plus money is still cheap, won’t be as cheap at the end of the year or next year.

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                        • #27
                          I would likely do it as it checks a lot of boxes. Where are you seeing that it's "overpriced" by $140K? As others have said, the worth of something is what another person is willing to pay.

                          As long as all of your financials ducks are in a row then go for it. Hopefully you're able to do more than 5% down but that's all that's needed for the interest rate you're comfortable with. I was wondering what the financial picture looked like if you've been an attending for 10 years with $300k income. There's a big difference between the 5% down being all you can put down vs. what you're willing to put down. Good luck!

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                          • #28
                            Housing is a hedge against inflation. Housing prices won’t come down again, I think people are just going to normalize this.

                            Comment


                            • #29
                              Originally posted by nastle View Post

                              Can but cons are
                              slightly less payment but boss much less happy

                              no idea when or if market goes down so how long should we rent ? As it’s timing it again
                              Since this is where we want to be > 20 yrs so I’m seriously considering buying
                              All the tongue in cheek aside, most of the posters agree with you. If you are planning on living there for 20 years then no need to fuss about the fact there has been a recent run up. If you like it, buy it. Otherwise, rent until the crash might work but it is literally unpredictable when that might be.

                              Comment


                              • #30
                                What does your spouse want?

                                You want to live in place for > 10 years and you must live somewhere.

                                Job is stable & u plan to finance the home, if you buy.

                                You cannot time the market for a primary residence any better than you can time the stock market.

                                If you are getting a loan now is the time.

                                Rates are 100% going up this year.

                                I would buy it.

                                Why did you look at the house?

                                Again, what does your spouse want?

                                Happy spouse is key to good life!

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