1) 0% down, 6.75% rate on $380k will make the monthly payment after tax benefit the same as the $2200 rent we’re paying now.
ra633: are you overall buying a good loan product? – what is the index (LIBOR-6mo)? how many yrs fixed? prepay penalty? rate caps? % of loans assigned/transferred in secondary mkt? points up front? APR?
2) if more price reduction is coming, say 10%, we would lose $38K on paper instead of $75K if we bought at 4S.
ra633: price reduction could be over 25%, that plus selling costs should factor in. You should plan for realized losses of about $110 to $130K.
3) The problem is that we can afford 4S and wife wants to own now after long waiting. If we buy a condo now in RB now, wife pressure will be gone, and we can wait for the good time to buy at 4S or Del Sure at maybe $630K instead of $750K, maybe in a year or two years?
ra633: make sure you really can afford the place based on a worst case scenario, not wishful thinking. I don’t think your analysis is honestly considering worst case. This includes the condo not renting at 100%, the impact on your assets/liabilities and debt/income ratios in worst case, interest rates in the future, etc.
4) when we buy a new bigger house later at a cheaper price which means the condo’s value is also reduced, we can keep the condo and rent it out, no real loss, only paper money loss. If we ride it out, we’ll be doing fine with the condo in the long run in RB.
ra633: again, make sure you are really considering that the worst case could happen, and err toward that side instead of the wishful thinking side. Overall, lower debt and higher assets right now is the best position to be in – hopefully you can explain that to your wife. One option – give her the choice of renting now in the nicer neighborhood, versus owning in a lesser desirable neighborhood…has that been discussed, and what is her position on that?
